Bummer: Some Dealers Say “Nyet!” To Carrying Chevy Fuego, Er, Volt

What happens when you take a “car” that costs $89,000 to make and is sold for $49,000 and shove it at dealers? (via Doug Ross, who has a handy dandy picture of what a Volt arriving at a dealership looks like)

(Auto Guide) Thanks to additional costs for services and repairs, some Chevy dealers are choosing not to carry the Volt.

According to Automotive News, the sales of the Volt at some dealerships does not justify the cost of special tools needed to repair and service the vehicles. Dealers are spending up to $5,000 on tools, including a new item that is needed to drain the vehicle’s battery to send back to GM in case of repairs.

Despite sales of the Volt reaching 20,828 through November, some dealers are unable to sell enough of the range-extended electric cars to make up the cost of the parts. Requiring to sell just five Volts to break-even on the costs of the tools, some dealers are instead opting out of the Volt authorized dealer program. Dealers believe that GM is raising the requirements to be a certified Volt dealer in order to create a smaller network of dealerships that would provide more Volts to more successful dealers and areas.

I wonder what the cost of all those new specialized fire extinguishers costs?

This might be a good time for a refresher on Crazy Barry’s Chevy Volt Sale

Save $10 on purchases of $49.99 & up on our Fruit Bouquets at 1800flowers.com. Promo Code: FRUIT49
If you liked my post, feel free to subscribe to my rss feeds.

Both comments and trackbacks are currently closed

RSS feed

You can login to comment with:

Trackbacks/Pingbacks

22 Comments

Comment by Gumball_Brains Subscribed to comments via email
2013-01-01 18:42:56

Requiring to sell just five Volts to break-even on the costs of the tools

Wait. How does that make sense? Does this mean that Chevy gives the Dealers a rebate for every car sold? Or, is Chevy selling to the dealer at a price point over $1,000 below what the user is paying for it?

So, the american people are actually in debt an extra $1,000 per vehicle than we thought?

Has anyone actually seen a Volt in the wild? I’ve seen about a dozen of the SmartCars on the road. I say a prayer over their sacrificial bodies as they drive 10mph faster than me.

I really dont see the SmartCar having sold 12x more cars than the Volt…… However, our local Volvo dealer has more SmartCars on display than I’ve seen on the road over the last 2 years.

Looks like the SmartCar ranges from $13,000 for base model with no options, to $15,000 mid-level with no options, and all the way up to $18,000 for the high model with no options. Yep, there are no options that can be selected except for the level of the car. Oh, and maybe the paint job.

So, you can either go down to the local Feed and Farm store and buy a $800 go-cart, or spend $18,000 for a smart cart.

And we wonder how people can vote for Obama ………

 
Comment by AC Points
2013-01-02 00:37:55

$89,000 to make … that’s faulty logic on several levels. Applying this sort of “logic” to a building developer, if the developer spent $10 million developing an office building and after 2 years had collected $2 million in rent, he’d be a failure because he had “lost” $8 million.

But lets suppose you still want to keep using this “logic”. In order to continue, one thing you have to do (and this will require some actual calculation) is update the number every month or so. The $89,000 calculation came at the point where 21,500 Volts had been sold. Now at the end of 2012 there have been approximately 35,000 Volts sold world wide so the “cost” is now $64,000 and it will go down each month as more are sold.

But, if you really want to show some “bad” numbers, why use calculations based on 21,500 Volts. Why not go back even farther. If you go back to the very first Volt it “cost” $1.2 Billion. Or if you use the number of Volts sold through 2010 its $3.7 million. Doesn’t that sound worse than $89,000?

 
Comment by Trish Subscribed to comments via email
2013-01-02 07:49:09

Sounds to me like the government should stay the F outta ALL businesses period.

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-02 09:52:59

What the **** you talking about, AC? That makes not one lick of sense.

 
Comment by john
2013-01-02 11:28:09

Forbes Magazine has written several articles on the “real” cost of the Volthttp://www.forbes.com/sites/boblutz/2012/09/10/the-real-story-on-gms-volt-costs/
They peg the cost of building a Volt at about 10,000 more than a compprable size product the GM Cruze.
And Jeez Gummie all that was written in a mass market popular magazine meant to be read and understood by millions.
The Volt currently outsells, according again to Forbes, about 50% of all the car models sold in the USAStill, the

Volt’s 133rd-place ranking placed it ahead of industry stalwarts like the Audi A6, BMW 7-Series, Porsche Cayenne and Mercedes-Benz S-Class, and it outsold most hybrids including the Toyota Prius plug-in, Honda Civic, Kia Optima, Toyota Highlander and Lexus RX 450h. Sure, the big-money incentives helped kick start sales last month, but the more Volts GM gets into consumers’ hands will closer the car and its advanced technology will approach the mainstream. It took Toyota many years to become profitable with the Prius, and the company took heat investing big bucks to develop its hybrid technology back in the late 1990′s when gas cost about a dollar a gallon.
http://www.forbes.com/sites/jimgorzelany/2012/09/24/august-chevrolet-volt-sales-redefine-failure/
Nexy month Cadillac’s Volt clone the ELR will also come out
http://mashable.com/2012/12/19/cadillac-elr-electric-coupe/
Toyota nexpects that by 2020 the Prius will be its largest selling model ever.

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-02 12:21:38

You are a complete and utter boob. While you should be estranged and ignored, I only respond in order to prove how hideously malinformed you are. Your link cites incorrect and fallible data. First, let’s begin with this.

133rd rank of sales? That is very low and they try and hype that by comparing it to sales of the uber-luxury cars? bwhahahaa

Next, data can easily be found to refute its other numbers.
Let’s go with the article’s current sales of Volts at 13,000 by the end of August. According to a pro-Volt website, the Kia Optima also sold 13,000 cars. Honda sold 25,000 Civic cars while only selling a total of 1500 hybrid cars.

The Toyota Highlander and the Lexus cars are also high end luxury vehicles.

But, let’s compare the Volt sales of 13,000 by August to the sales of what everyone else is buying. Again, from your own article:

Among passenger cars, the Toyota Camry leads the pack with 280,536 deliveries through the end of August (not counting 30,587 Camry Hybrid models). The Ford F150 pickup truck did even better with a phenomenal 408,656 units

Except those numbers are Year-To-Date numbers. hmm

How about government motors Chevy Truck sales? Looks like 2012 to August sales of Silverado sold 38,000 trucks. Oh, wait. what is that I see?

I see that the 13,000 sales of Volt are actually a YTD number and not just 2012 sales. only 2800 Volts were sold in August 2012 alone leading to a YTD sales of 13,000 from last August 2011.

Heck, even most of Buick’s comparable line of cars outsold the Volt.

Hey, at least Volts outsold the $100,000 Chevy Corvette by 1,000 units.

Out of GM’s total sales of 240,000 cars sold, Volt made up 1%.

Yeah… they are really taking over the market.

 
Comment by gitarcarver
2013-01-02 13:01:11

Oh john, you are such an troll.

Yes, Forbes has an article saying that the Volt outsold 50% of the cars sold in the US. What the article doesn’t say, and you refuse to examine, is that the 50% that Volt sales are being compared to are 1) high end luxury cars. 2) high end sports cars, and my favorite 3) cars that are being discontinued and were sitting on car dealer’s lots.

Did the Volt outsell some in model year cars? Sure. But one has to look at the market and the projections. The Volt was expected to sell more in a month than it sold in a year. Even with the propped up government sales, the Volt never came close to sales projections. In every other instance, that would be a failure but because the Volt cannot fail for political reasons, people of your ilk want to make a big deal out of the wrong numbers.

Your comparison to the Prius is off as well. When the Prius first came out, it wasn’t a leader in the market for its type. It wasn’t at the bottom for it’s type. It WAS market. People were not used to the idea of a dual drive vehicle such as the Prius. That is not the same with the Volt. The technology and the market saturation of what a Prius and cars of that type are like has increased greatly.

The Volt is part of a market that the Prius created. If anything, the Volt should have had an easier time than the Prius but instead, their sales for the first year are comparable.

And yes, while the cost of the Volt per unit drops with each 2013 unit sold, it should be remembered that the Volt is due for a major overhaul and redesign for the 2014 model year. This means more tooling and more line changes. Over its 2013 sales life, the Volt will have cost more to make than it brought in sales.

That doesn’t matter to you because you believe that government should control everything. But in the real world, it matters to the rest of us.

Any car that costs more to make than it brings in, fails to meet sales projections and has had reliability issues that the government tried to hide cannot be considered a “success” at this point in time.

 
Comment by AC Points
2013-01-02 16:42:19

Gumball,
It’s not that hard to understand if you read the reuters article where the number came from and follow their calculations. First they estimated the per vehicle production cost for the Volt to be between $20,000 and $32,000. Then they took the estimated R&D costs for the Volt ($1.2 billion) and divided by 21,000 Volts sold to come up with an R&D cost per vehicle of $57,000. Then they added the top end of their production cost per vehicle of $32,000 to the R&D cost per vehicle to come up with a total cost of “as much as” $89,000.

Today GM has sold over 35,000 Volts so the R&D cost per vehicle now would be calculated as $1.2 billion divided by 35,000 or approx. $34,000 per vehicle. The R&D cost per vehicle will continue to go down as more are sold. Also keep in mind that if the results of that R&D is used for any other vehicles like the new Cadillac plug-in coupe they are coming out with, then those sales will also have to factored in to the distributed R&D costs.

Anyway just like you don’t expect the building developer to recoup his development costs after two years, you don’t expect a major R&D effort like the Volt to be recouped in 2 years either. And continuing to claim the $89,000 “cost” is like saying the building developer is still “losing” $8 million after 3 years even though he collected another years worth of rent.

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-02 17:31:10

So, you are attacking a blogger about writing a post citing a reference that was correct AT THAT TIME? Should he have verified his numbers down to the day?

But, let’s use your numbers. Instead of $89,000 NOW, now it is $66,000?

HEY… weird. That’s still over the $40,000 that it is being sold for. And then add on $7500 of government subsidy.

I’m sorry, what was your point again?

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-02 18:54:24

Another thing to note…. years after a product is brought to market, prices normally decrease as production is refined and as the initial pre-production and research costs are repaid.

Strange how that doesn’t happen for autos.

(guessing it has to do with product turnaround)

 
Comment by gitarcarver
2013-01-02 19:38:37

AC Points,

… read the reuters article where the number came from and follow their calculations.

It is not “Reuters’ number.” It is from a group of experts in manufacturing and industry analysts.

Quoting the article:

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, according to estimates provided to Reuters by industry analysts and manufacturing experts. GM on Monday issued a statement disputing the estimates.

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.

GM’s basic problem is that “the Volt is over-engineered and over-priced,” said Dennis Virag, president of the Michigan-based Automotive Consulting Group.

It appears that the number that article quotes takes into account further sales and lowering of R&D costs. But something else has to be taken into account. The government is the largest purchaser of the Volt. So while the US taxpayer funded the development of the Volt, the government just hit the taxpayer for the cost of the actual produced vehicle.

This means that even accepting your number that the car costs a mere $34,000 to make, the government sales actually push that number back up – not down.

What you and the government are trying to claim is similar to me developing a product for $100, then “selling” it to myself for $200 and then trying to claim I made $100 in profit when in fact I am out $300 and have no profit.

The other flaw in the “sales” number is the leased Volts. Many people drive leased Volts and they are coming back to the dealers in two years – before even the sale or cost of production has been re-couped. Those units as well will have cost the taxpayer more and drive up the $34,000 figure.

(As an aside, your analogy with a real estate developer is faulty. Most of the time developed property goes up in value, allowing the developer to sell the property at a profit. In the case of cars, they all go down in value due to depreciation.)

Because of where I live, the Volt is impractical. Does that mean the Volt, its “offspring” or whatever will be a failure in the future?

No.

The problem is not the overall performance in sales of the Volt in the future. The problem is the deceit behind the numbers on the Volt sales and the “cheerleading” by the government that goes with it.

The administration invested heavily in the Volt and while it has been a failure in meeting sales projections, the administration and GM keep propping the Volt as a success right now.

That’s the real problem, isn’t it? The numbers, sales, costs, etc are being promoted as a “success” when even according to you, the car loses more than it brings in from a sale.

That cannot be classified as a “success” in any economic sense of the word.

 
Comment by AC Points
2013-01-02 20:13:57

Gumball,

I’m sorry you missed the point. There were actually a couple.

First that the argument itself is flawed. That you don’t factor R&D costs across units sold so far. You try and predict the units that will be sold over the life of the product and determine whether the investment will be recouped.

Second, I understand that if the motivation is political, then accuracy and facts are often discounted. I realize politically motivated contributors often feel that since their cause is just, they can be liberal (np) with their “facts”. But the point is if you want to be taken seriously you should at least be accurate. That will give the rest of the argument more credibility. When I read an argument where I know the facts are distorted or out of date I tend to discount the rest of the argument. Of course if you think you’re just preaching to a group of like minded individuals who aren’t going to think critically then facts don’t much matter.

The article was based on sales numbers from early last summer. At the very least the author could have qualified the statement with the time frame. As it is, its been over 6 months and the numbers have changed significantly. So at the very least its worth asking yourself just how long can that number be used as a legitimate “fact”? If it gets repeated by someone next summer will it still be OK? What about a year from now?

 
Comment by gitarcarver
2013-01-02 20:25:59

AC Points,

I keep wondering why you are arguing a point that the article already addresses.

The Reuters’ article repeatedly says that the cost of the Volt will decline over time as more units are sold.

Why are you dismissing that point? Are you hung up on the number itself? Isn’t it bad enough that according to industry experts the Volt will NEVER be profitable? Or do you want to dismiss that the Volt won’t be profitable for at least 3 years according to GM? (Both points are in the article.)

Let’s throw the actual dollar amount out for a moment.

Are you really trying to say that the Volt is making a profit for GM and for US taxpayers now?

Isn’t that the real issue?

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-02 20:28:44

WOW. That doesn’t sound at all preachy AP. Talk about trying to be holier-than-though.

You gripe and carry on that the “writer” doesn’t know the correct and exact cost of producing a Volt, yet, you refuse to tell us what the “correct” and current production costs are. And, because of your attitude, please be specific down to the dollar.

Also, if you are going to preach about specifics and correctness, then please be correct in your preachiness. The Reuters article was written 3 months ago. Not 6.

Citing data that is also 3 months old is not egregious. Especially considering the MASSIVE amount of Volts sold since then. A whole massive amount of … 6,000 to 7,000 units. WOW. talk about saturating the market, huh?

 
Comment by AC Points
2013-01-04 23:36:04

Gumball, You are correct. The article was from 3 months ago and yet for whatever reason they used sales numbers from 6 months ago. Whether that was because they were lazy, or incompetent or they were intentionally trying to deceive I don’t know. If you want a reference point look at the total sales now at the end of 2012. Once the European sales numbers come in for Q4 its looking like total sales so far will reach 40,000. If you believe that 21,000 had been sold as of September, then 19,000 would have to have been sold in the last 3 months. That’s just not the case. The 21,000 was reached some time at the beginning of the summer.

If you want to use the reuters method its really not that hard to calculate. Using the their method and calculating at various sales points you can calculate how much they were “losing” at any sales point:

After the first Volt was sold they were “losing” $1.2 billion per Volt.

Through 2010, it was $3.7 million per Volt.

Through 2011 (first full year of sales), $121,000 – $133,000.

Through summer 2012, (reuters sales point) $77,000 – $89,000

Through 2012, $11,000 – $23,000.

Now lets guesstimate that they sell another 20,000 units each of the next two years. Then:

Through 2013, $1000 – $13,000

Through 2014, ($4000) – $8,000 (so here you’re breaking even on the optimistic end of the range).

So that’s the reuters method of showing a “loss” per unit sold which I think is ridiculous because it is continuously changing.

The accepted method and one that can lead to some legitimate discussion is to project unit sales needed to break even (ie recoup your R&D costs). Again using reuters production cost estimate range the unit sales to break even are 63,000 on the optimistic end, 92,000 at the midpoint of the range, and 171,000 on the pessimistic end of the range. My hunch is its closer to the pessimistic end of the range so maybe something like 130,000 to 140,000 units.

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-04 23:53:28

Thank you AC. And I appreciate you continuing to clarify. Cogent discussions are always appreciated.

I don’t disagree with you should your original starting numbers were the only numbers.

None of us really know, especially me, so I am throwing crap out there.

Is the 1.2 billion a Research and Development cost? If so, that is the INITIAL cost. And that cost has to be regained from each car sold. And at the time the Reuters article was written, it was estimated to be $89,000 per vehicle.

Each vehicle also has its own production cost. The batteries alone cost 8,000 to 10,000. Repair tools alone cost 5,000. I can’t believe that a $40,000 car minus the 10,000 for battery, now $30,000 costs less than that to produce. And $30,000 is the retail price. OEM price has to be $20-25,000. Then production costs then have to be $15,000?????? From a company that pays 60% or more to pensions?

Everything we’ve heard from the beginning was that GM was going to shortsell this vehicle. Thus, the main point carries on….. GM is losing money on each no-volt sold.

 
Comment by AC Points
2013-01-05 02:16:17

gitcarver,

If you’ve got some info that the government is buying most of the Volts, I’d be very interested to see it. The best info I’ve been able to find indicate about 15% of Volt sales are fleet sales, that includes corporate, commercial and government. As to the taxpayer funding the development of the Volt I’d certainly like to understand how you come to that conclusion. The Volt program was approved for go ahead in 2006, and the production model was finalized in 2008. That means the bulk of the R&D was done by that time. This is prior to government involvement with the company.

As to the building development analogy. I didn’t think it was possible to misunderstand it. Its not comparing a building development with buying a car. Its drawing an analogy between recouping the development costs of a real estate project with recouping the development costs of a car program. In any product development project you will weigh all the factors and determine what sales at what price point over what amount of time you will need to recoup your R&D costs to help determine whether to go ahead with the project. At any point before the break even point you will still be in the red. That doesn’t mean its a failure. And even if you aren’t making it to the break even point as fast as you would like that still doesn’t mean its a failure. You might be interested to know it took the Prius program 5 years to break even.

You make some good points about the Obama administration politicizing and hyping the “success” of the Volt program, however in my mind that doesn’t legitimize spreading misinformation about it. That makes you just like them. As with so many politicized topics, the Volt program is neither great a success as the left wingers would like you to believe and it is not as great a failure as the right wingers would like you to believe.

 
Comment by gitarcarver
2013-01-05 11:44:36

AC Points,

There is a Forbes article that discusses how the Volt sales numbers are inflated. In one month, the Volt reported sold 13K units but in actuality, between leasing and government sales, the number was less than 10K.

I don’t see how you can say that the taxpayer did not pay for the Volt development as when GM went through its (illegal) bankruptcy, the costs of the Volt were part of the balance sheet as to why the US should bail the company out. Would you contend that the company that purchases Hostess did not pay for Twinkies?

The problem with your building development analogy is that it is false. I understood what you were saying. The problem is that manufacturing and real estate are not comparable. It is almost as if you were saying that in a baseball game the batter should not have been called out on strikes and instead should have been awarded 2 free throws. After all, both are games, right?

As for the Prius, what you don’t realize is that you made the point for the rest of us. The Prius did take a long time to make money but that included developing that market for that vehicle type. But here’s the other issue. At the time of the Prius development, Toyota was a profitable company. They could afford to lose money on the Prius while making profits elsewhere. That is not the case with GM who still has not paid back all of the money it was given despite being able to discharge debts and financial obligations that no other company in the history of the US was ever able to do.

I am not sure where you get the idea that anyone here has “spread misinformation” about the cost or success of the Volt. If anything, a case can be made that you were the one who continually failed to read the entire source article relying on a knee jerk reaction rather than the totality of the argument.

For example the article cited stated that at the time, the cost of the Volt was $89,000 but would be expected to drop. You claimed Reuters made the number when in fact it was experts in the field. You then said the cost would drop and that failing to note that was wrong. The problem is that the article did note it.

Yet there is another issue that you have failed to take into account. You want to chastise the writer of this blog for what is in essence “locking a cost in” and not taking into account additional sales. That is a fair point to an extent, but perhaps you missed that the Volt line was shut down. Critics claimed the line was shut down because of overstock, while GM claimed the line was being converted to make Impalas.

If you are going to blame people for not taking updated sales on the Volt, why aren’t you looking in the mirror for not taking new costs on the Volt? Typically retooling for new model year is several hundreds of millions of dollars. But GM isn’t retooling the line for a new model year, it is retooling the line for a new car. That is even more costly. Shouldn’t you have added that cost into the Volt cost as well?

The fact of the matter is that with all of its advantages – the established market, the government rebates, the failure of the government to report any negative issues with the Volt, the attack on Toyota for no cause, etc – the Volt failed to meet what were termed as “low end sales forecasts” by less than 50%.

Market analysts say this Volt won’t make a profit – ever.

By any measurable standard, the Volt is a failure.

 
Comment by AC Points
2013-01-08 03:00:54

Gumball, I screwed up one of the numbers I posted. I posted reuters calculated build cost of $77,000 – $89,000 instead of their calculated loss per vehicle of $37,000 – $49,000 for the summer of 2012.

I also figured out the problem with reuters number of units sold. They used the number of Volts sold in the US through August for their calculation. They should have been using world wide sales which was aprox. 28,000 at that point. If they had used the correct numbers their calculation would have given a “loss” of $24,000 – $36,00 at the time time of the article.

As for whether they are losing money, thats open for debate. With the offers they’ve had this last quarter its hard to believe that they made much money in Q4. I’ve just been using reuters numbers though in all the calculations I posted. Reuters calculated $56,000 in R&D costs per vehicle and they assert that they are “still losing” $49,000 per vehicle. That means they are estimating that they are clearing $7,000 per unit over the production cost of which at least some can be put towards paying off the R&D cost. At 40,000 units sold so far that comes to $280 million. So perhaps something like $200 million could be applied towards the R&D cost.

You can also experiment with the numbers I published to see what happens to the break even point depending on sales. So you could see what happens if they only sell 10,000/yr or what happens if they sell 30,000/yr. Obviously it would take a lot longer to recoup R&D costs with sales of 10,000/yr and it would happen a lot faster if they sell 30,000/yr.

Obviously there are a lot of other factors. You’d expect production costs to come down over time, and the more sales grow the more favorable those costs can get. On the other hand if you’re expecting to extend the program then there will have to be some amount spent on R&D for whatever upgrades are planned. And of course as mentioned before, when the Cadillac plug-in comes on the market next year, since it uses the same platform those costs and sales will have to be factored in as well.

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-08 10:01:37

Thank you AC. However, I think you are still missing the point. GM and the taxpayers are still losing money. Taxpayers at the tune of $7500 per any electric vehicle. GM to the tune of, as you put it, a loss of $24,000-$49,000 per vehicle.

That loss is only to pay off the R and D costs. This does not recoup the cost of building the silly car.

And, you are right, it will take years of good sales to recoup the costs of R and D and construction. However, signs are pointing to a quick end. Stories are coming out about dealerships already looking to bail on Volt as it has already cost them around $10,000 in tools – for those who did buy in to this menagerie.

For the US, the average number of car sales per dealer is 2 per month. Please tell me how that is a great and astounding. And most of these sales is to Fleet and Governments. And they too are taking the tax payer subsidies. Is that fair?

 
Comment by AC Points
2013-01-08 18:22:14

Gumball, Go back and read my original post. The only thing I’ve been posting about is the re-posting of old calculations and the faulty logic behind them. And subsequently trying to show the progression of the calculations and then suggesting some more useful calculations. The fact that I’m pointing this out does not mean I’m defending the Volt. It’s not related. I’m sorry you can’t separate this in your mind. I’m sure you think that if you oppose the Volt that you can only say negative things about it whether they’re true or not, and that if someone points out that some of those things are incorrect then they are defending it. I see the same thing with Volt proponents that think you can only say positive things about it whether they’re true or not and when I point out that some of those things are incorrect they accuse me of attacking it. I just like the discussion to be about the facts.

With respect to the very first sentence in the article at the top of this thread, I’m completely confident that 6 months from now there will still be people posting that it costs $89,000 per unit to make the Volt even though that number is more incorrect every day. And if I point out to them that this is faulty logic and they need to update the calculation regularly, there will still be people like you who will assume I’m defending the Volt and want to point out all the bad things about the it. I don’t care. I already know all that stuff.

Now here’s something that most Volt proponents haven’t thought through. If you point out that its prohibitively expensive for most people to buy a Volt, they will jump all over you saying that with the $7500 federal tax rebate and sometimes a couple thousand in state tax rebates its cheaper to operate the Volt in the long run than a lot of cars and so everybody should be buying one. You can then point out that the “good deal” courtesy of the government rebates is only available to the top 45% of income earners. The bottom 50% – 55% of income earners in the US pay little or no income tax an therefore can’t use the rebate and consequently would have to pay full price which is way too much.

Now I’ll give you a little of my own opinion which I’ve been trying to avoid to this point. Most Volt proponents seem to think this is a vehicle for the masses. Its not. Its a vehicle for an upper middle class urban household with at least one and more likely two other vehicles. Most Volt detractors seem to think that because its not a vehicle for the masses that its a failure. Its not. Its a niche vehicle for a specific upper middle class urban market segment and it doesn’t have to sell in the same volume as a Camry or a Fusion to be viable. The fact that many rural and small market dealers are opting out of the program makes perfect sense to me. I don’t have a problem with the government supporting plug-in technology for a few years to help it get off the ground. But eventually it has to be able to stand on its own. One small consolation is that there is a cap on the number of units for the plug-in rebate program so I think it will run out in 4 or 5 years. We’ll see at that point if more money is thrown at them or they’re forced to stand on their own.

I’ll leave you with one last thing that may make you ponder a little who the typical Volt buyer is. As of a few months ago in the US, the top 3 vehicles traded in on a Volt were 1) Toyota Prius, 2) BMW 3 series 3) Silverado Pickup. Kind of makes you scratch your head a bit.

 
Comment by Gumball_Brains Subscribed to comments via email
2013-01-08 22:13:21

AC, I understand you are not promoting or defending. Yet, you still wish to argue a very minor point. Yes, the data is old. It was valid then. And the value of R and D repayment doesn’t change that much since the number of vehicles sold doesn’t increase that much. You are yelling about the hole in the damn while the water is flowing over the top of it and undercutting the base of it.

You continue to ignore the real truth of how much the Volt’s cost to build per car. And you ignore the cost to taxpayers for every electric and (maybe) hybrid vehicle sold. That adds to the cost to the american taxpayers over and above any price that was paid for R and D. THen add the loss in value from the current leases.

And, no, we don’t think the Volt is a failure because its not a car for masses like Corolla or Silverado or F150. It is a failure plain and simple because it was forced upon the American people, no one wants it. Chevy was going to dump the car before rollout because market showed it would be a non-seller. But Obama made them sell it. And then when you count in the new CAFE imposed mandates (that are based upon only cars up for sale, not actually sold) then GM is allowed to look better on the books than in real life. (the tyranny of CAFE standards is a topic of another rant)

Only those people who have high incomes are able to afford this type of vehicle and its electrical support infrastructure. Only the well off can afford to buy a luxury car as a secondary car – and yet they too will get a tax subsidy.

Early on, it was reported that Chevy dealerships were selling the Volts to each other around and around in order to continue to get the 7500 tax writeoff. No, that didn’t last long after the media allowed the story to get out. Each of those round-about sales though counted as a sale.

As of a few months ago in the US, the top 3 vehicles traded in on a Volt were 1) Toyota Prius, 2) BMW 3 series 3) Silverado Pickup.

Do you happen to have a link for that? To me, this also means that only the well off are buying the Volts, in addition to the governments. That again, is another major reason why this is a failure. Government buying a government car and billing the tax payers for it.

 

Sorry, the comment form is closed at this time.

Bad Behavior has blocked 10323 access attempts in the last 7 days.

Optimization WordPress Plugins & Solutions by W3 EDGE