Obama touts this as success

[pspr]

Quote from 377OHMS:

"GM is losing thousands of dollars on every Volt, raising the question of how long it can keep eating the steep losses."

As long as there are taxpayers to make up the GM losses they'll continue to deeply discount these massively flawed vehicles.

Bad business motto:

We lose a little on each one but we are making up for it with volume.

 

[377OHMS]

Quote from pspr:

Bad business motto:

We lose a little on each one but we are making up for it with volume.

Well the US Government has deep pockets. Unfortunately those pockets belong to taxpayers.

 

[AAAintheBeltway]

Quote from 377OHMS:

"GM is losing thousands of dollars on every Volt, raising the question of how long it can keep eating the steep losses."

As long as there are taxpayers to make up the GM losses they'll continue to deeply discount these massively flawed vehicles.

I don't think that's accurate. The R&D money is already spent, so that's what we call a bygone in economic terms. Bygones are forever bygones.

The relevant question now from a business standpoint is how much it costs them to build the damn things. I saw an estimate of something like $20-32,000 I believe it was. So they are at least covering their out of pocket expenses.

Put another way, it is a rational decision to sell them for at least marginal cost of production. It would be better to sell them for more, but if they can't, they are better off getting something out of them.

 

[pspr]

They still need to eventually recover the R&D. Selling the volt for $29,000 has bumped up the sales a bit but now the vehicle is being sold at or below production cost break even. And that's with the government $7,500 incentive helping sales. But before taking into account marketing, dealer markup, commissions and other costs to sell the car.

I don't see how GM recovers on the volt. The price must go higher for GM to get out of the volt mess. How are they going to increase margins if they have to lower the price to where they can't sell the cars for a profit now?

 

[377OHMS]

Quote from pspr:

They still need to eventually recover the R&D. Selling the volt for $29,000 has bumped up the sales a bit but now the vehicle is being sold at or below production cost break even. And that's with the government $7,500 incentive helping sales. But before taking into account marketing, dealer markup, commissions and other costs to sell the car.

I don't see how GM recovers on the volt. The price must go higher for GM to get out of the volt mess. How are they going to increase margins if they can't sell the cars for a profit now?

They might have decided that they need first to sell the idea of hybrid ownership and view the loss-per-vehicle as a long term investment in the technology.