The question of just how much money General Motors is losing on the Chevy Volt program has become a political football with some critics of the Obama administration’s priorities saying that GM loses a quarter of million dollars on every Volt sold. With that kind of hyperbole getting thrown around, it’s nice to see that the Reuters new agency actually consulted with informed experts, did the math and came up with more accurate and realistic sums on how much it has cost GM to put the Volt into production. The experts that Reuters consulted said that at current production levels, including development costs, the Volt represents between $75,000 and $89,000 in costs per vehicle to GM. With a retail price around $40,000 before the tax credit, that means that GM loses money on every Volt. Since, as mentioned, the Volt has become controversial, the Reuters report has gotten some attention. To be honest, it’s not really big news that the 1st gen Volt won’t make money. Toyota burned through a lot of cash turning the Prius into a success.
Speaking of the Prius, though, buried at the end of Reuters’ comprehensive and lengthy report is a ray of sunshine for Chevy’s range-extended EV and perhaps some ammunition that can be used by Volt defenders against the car’s many critics. The article repeats the part of the Volt’s early history back in 2006-2007 when Bob Lutz was casting about for a green product to “leapfrog” Toyota in consumers’ minds. You might say that Toyota and the Prius was the raison d’etre of the Volt’s existence. I don’t know if the Volt has changed GM’s public image, but the ultimate measure of consumer attitudes is sales, particularly sales relative to the competition, and there is some indication that the Volt is indeed changing some minds. Doug Parks, GM’s current VP of global product programs and the person who headed the development of the Volt, says that Chevy’s high profile EREV is capturing sales from the Prius. Attractive lease rates have brought more buyers of non-GM products into Chevy showrooms to consider the Volt and the number one non-GM car traded in on the Volt is currently the Toyota Prius. Considering that even with the $7,500 federal tax credit for which the $40,000 Volt is eligible, the Volt is still about $7,000 more than the $24,795 Prius (the new Prius Plug In, which actually is a more direct competitor to the Volt in terms of battery only range, is $32,795 without the tax rebate) it’s an encouraging sign that Prius owners are trading up to the Volt.
Lutz wanted GM to get some of the green and techie luster that was then shining on Toyota because of the Prius. The bailout and politics have undoubtedly reduced the gloss of that potential luster but in the trenches of the showrooms, where the success of a car is ultimately determined, Lutz’s acumen appears to have been on target.