Skip to comments.Pentagon Plans to Buy 1,500 Chevy Volts
Posted on 09/12/2012 2:37:28 PM PDT by jazusamo
General Motors, the financially-strained U.S. automaker that absorbed billions of taxpayer dollars through the auto bailout, has secured a new deep-pocketed customer for its purportedly failed electric vehicle the Chevy Volt. That customer is the Pentagon, which plans to make the federal governments military operation more environmentally-friendly by reducing its use of fossil fuels with a conversion to electric vehicles.
The Department of Defense (DOD) plans to purchase 1,500 models of the Volt, which has been burdened with lethargic sales and mounting losses since the automaker launched it in 2010. The Marine Corps Air Station in Miramar, California bought two of the green vehicles in July, and another 18 more will soon be shipped to Joint Base Andrews in Maryland, where Air Force One is lodged.
The Obama administration has been a prominent advocate for the Chevy Volt, as the President himself pledged this year to buy one and drive it myself five years from now when Im not president anymore. Moreover, the government has offered a $7,500 tax break to bolster GMs sales on the electric vehicle. However, the federal governments spendthrift strategies have produced meager results.
Citing data released by the consulting firm Munro & Associates, Reuters reported Monday that nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds. Reuters noted that each one of the Obama-hyped vehicles cost upwards of $89,000 to produce, with a sticker price of less than $40,000. Further, the news agency reported:
Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.
And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.
The vehicles steep sticker price, combined with logistical concerns about charging the vehicles, has severely strained GMs initial sales projections. Discounted leases as low as $199 a month helped propel Volt sales in August to 2,831, pushing year-to-date sales to 13,500, well below the 40,000 cars that GM originally had hoped to sell in 2012, Reuters added.
The automaker contested the $89,000 estimate, calling it grossly wrong, in part because the reporters allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program.
However, president of the Michigan-based Munro & Associates, Sandy Munro, told FoxNews.com that the number should be relatively close, while she acknowledged that it was estimated by using industry standards, without any detailed inside information regarding the Volts production. GM has never publicized actual figures on production costs for the electric vehicle, partly because many of the Volts parts are shared with other GM vehicles, including its internal combustion engine. Heres how Reuters figured its calculations:
The independent cost estimates obtained by Reuters factor in GM's initial investment in development of the Volt and its key components, as well as new tooling for battery, stamping, assembly and supplier plants a price tag that totals "a little over" $1 billion, Parks said. Independent estimates put it at $1.2 billion, a figure that does not include sales, marketing and related corporate costs.
Spread out over the 21,500 Volts that GM has sold since the car's introduction in December 2010, the development and tooling costs average just under $56,000 per car. That figure will, of course, come down as more Volts are sold.
The actual cost to build the Volt is estimated to be an additional $20,000 to $32,000 per vehicle, according to Munro and the other industry consultants.
Responding to the news agency, GM asserted that every investment in technology that GM makes is designed to have a payoff for our customers, to meet future regulatory requirements and add to the bottom line. The Volt is no different, even if it takes longer to become profitable.
In the end, however, the real controversy stems from the fact that American taxpayers have been forced to pay billions of dollars to an automaker that is failing to turn a profit on a vehicle being promoted by politicians, including the President himself. The Chevy Volt, as well as the U.S. auto industry as a whole, has become a political whirlpool over the past few years, and despite already having sunk a mounting sum of taxpayer dollars into the Chevy Volt, the Pentagon is forcing Americans to pay more in another political statement delivered under the worn-out maxim of environmental responsibility.
I have been saying for months that I believe that a large percentage of Volt sales (such as they were) were by the government, and that they are probably sitting, rusting on some missile range in Nevada. Well, here we go.
Just drop them as unguided weapons on our enemies and let them go broke trying to building charging stations.
So, will GM charge US $89,000 each or will they give us a deal and charge us $40,000 which is $49,000 under invoice?
They could fire them off the catapults on aircraft carriers, but I’m sure that submerging a Volt in navigable waterways breaks about 100 EPA regulations.
The taxpayer supports Obama Green if he wants to or not!
it is the black beret all over again.
perhaps these chevy volts should come with a pink berret and easy to wave white flags.
Perfect for our pro-homo general officers.
Gutting our defense budget $800B but buying 1500 Dolts?
What is worse is Boehner isn’t opening his mouth.
Please forward to Rush and to Boehner.
Maybe they come equipped with ten thousand dollar toilet seats.
And the Defense Dept. will be blamed for budget woe's....
They could by a couple of F22's for that.
This will be the “gay” vehicle for those DADT repeal recruits. They will come with a pink berret and a horn that makes a laughing sound.
Which is about a week’s worth of production. So this waste of tax payers dollars keeps the plant running for an extra week.
What has happened to our military? This is sick. Next thing they will do is eliminate lead and DU in our ammo so we don’t hurt the environment. Meanwhile we have lesbian generals and Muslims throughout the ranks.
Whatever happened to the mission of killing and breaking things?
I think the lifetime volume of the program has already been reached. No fair counting government purchases to make it look good.
That’s what’s so pathetic about this. They’re slashing the Defense budget but buying these overpriced turkeys to bolster Obama’s “green thing” while pumping more taxpayer money to Government Motors and the UAW.
every new law, every order jug ears has done should be overturned in the first couple of weeks.
Investigations into the DOJ, Holder, release all of jug ears records, throw out the lawyers in the DOJ , see which pro homo and homo and cross dressers were promoted in the military and lets stop this utter madness.
STFU.....Boehner has NOTHING to do with this....go back to DU, TROLL! Why the HELL would you bring up Boehner and NOT OBAMA????????? IDIOCY....WE are TRYING to WIN a WAR HERE....go away, troll.