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GM willing to lose money on Volt

GM willing to lose money on Volt

Kenneth Hall March 20th, 2008 Kenneth Hall By Kenneth Hall Author March 20th, 2008
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December 31st, 1969 GM product czar Bob Lutz has admitted the carmaker's failure to capitalize on hybrid and electric cars, technology it’s had since the 1960s, was a mistake. Speaking at the New York Auto Show, Lutz went on to reveal he regretted not beating Toyota in the hybrid race and that GM had effectively wasted its opportunity. In fairness, few carmakers predicted the sharp rise in fuel prices during the last couple of years or the stiff emissions and fuel-economy regulations set to roll in over the next decade but GM is set on fixing its error. To do this GM is going to extraordinary lengths to improve its green credentials and is even prepared to lose money “for years” on its upcoming Volt plug-in hybrid, reports the Detroit News. While sales of the Volt aren’t expected to bring a profit for several years, the logic behind the move is to re-establish GM as a technologically superior company. Lutz said GM's lack of alternative energy technology presented such a poor image that it was costing the company billions of dollars in lost customer loyalty and attraction. Lutz is predicting the introduction of the Volt will be as when the Ford Model T first came onto the market. In fact, he claims GM may have underestimated the popularity of plug-in hybrids and that sales of the Volt could top 500,000 units annually. That’s a lot of cars to be losing money but if it proves successful it will likely make consumers more receptive to GM’s other, more profitable, hybrid models.GM Volt Concept
GM willing to lose money on Volt

GM willing to lose money on Volt

Enlarge Photo

GM product czar Bob Lutz has admitted the carmaker's failure to capitalize on hybrid and electric cars, technology it’s had since the 1960s, was a mistake. Speaking at the New York Auto Show, Lutz went on to reveal he regretted not beating Toyota in the hybrid race and that GM had effectively wasted its opportunity.

In fairness, few carmakers predicted the sharp rise in fuel prices during the last couple of years or the stiff emissions and fuel-economy regulations set to roll in over the next decade but GM is set on fixing its error. To do this GM is going to extraordinary lengths to improve its green credentials and is even prepared to lose money “for years” on its upcoming Volt plug-in hybrid, reports the Detroit News.

While sales of the Volt aren’t expected to bring a profit for several years, the logic behind the move is to re-establish GM as a technologically superior company. Lutz said GM's lack of alternative energy technology presented such a poor image that it was costing the company billions of dollars in lost customer loyalty and attraction.

Lutz is predicting the introduction of the Volt will be as when the Ford Model T first came onto the market. In fact, he claims GM may have underestimated the popularity of plug-in hybrids and that sales of the Volt could top 500,000 units annually. That’s a lot of cars to be losing money but if it proves successful it will likely make consumers more receptive to GM’s other, more profitable, hybrid models.
GM Volt Concept
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Tags: General Motors

Posted in: News, Hybrid


Comments (11 total)

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  1. By chris #1, Posted: 3/20/2008

    i doubt they'll lose money on a car that 500,000 people are willing to buy. they should offer this car like almost every electronic product is offered. hugely expensive at first, to recover cost, and lower the msrp every 3 months or so.

  2. By Ivan #2, Posted: 3/20/2008

    Ha ha , GM provoked Toyota to start hybrids in first place, by making EV1.
    GM has only itself to blame. And from what I remember from that Electrical Car movie,
    they sold batteries factory too, so now they have to start for square one 12 years later.

  3. By chris #3, Posted: 3/20/2008

    ivan; so what you're saying is GM did an all electric car and a couple years later, honda and toyota both responded with relatively pathetic hybrids? remember, the first prius wasnt very good.......

  4. By Green Flag #4, Posted: 3/20/2008

    They lose money on everything else so why not?

  5. By Gus #5, Posted: 3/20/2008

    Some people just love to put down any American efforts.
    Toyota lost money on the first Prius', and some analysts say that when development is factored in, they still only break even.
    That said, the cost of a Prius over the cost of a Corolla is only recovered after about 100,000 miles of driving, which to me doesn't make hybrids a lot of sense.

  6. By Froggie #6, Posted: 3/20/2008

    The movie Ivan is referring to is "Who Killed the Electric Car?" GM only has herself to blame. They did it to themselves.. Now playing catch up 12 years later... haaaaa

  7. By Gus #7, Posted: 3/20/2008

    Don't be daft.
    Nobody plays catchup these days, the technology is out there, everyone knows about it, it's just always been a question of does it make sense either from a finacial standpoint or a sales standpoint?
    Toyota still only breaks even on the Prius.
    If Ford wanted to turn the Focus into a Hybrid, they could put one on the streets in a year. But remember the whole hybrid thing is NOT the answer to all our problems. People are seriously snowed thinking they are so much better off with a Prius. Buy a Corolla, save the money up front and the not have the expensive repairs down the road.

  8. By Gus #8, Posted: 3/20/2008

    Oh, and who was the first to bring an electric car to market and lease it in large numbers?
    And who's the first to bring a plug-in hybrid (the only kind that really pays dividends very quickly) to market?

    Oh yeah, that would be GM.

    So now you know where you can stick your "catch up".

  9. By Ivan #9, Posted: 3/20/2008

    Gus what's your point? I read your post two times and I dont' see it.
    Is it, GM in electrical car market only to make money, but 10 years ago it was
    not profitable enough, so they pulled off & now that prices on oil are record-high
    they decided to jump in again . . .AKA , GM in it only to make money? I am sure of it.

    You seem to forget that one of the main reasons for electrical cars is to save some money
    for us, consumers, by bypassing overpriced oil.

    Also, I am sure it takes a lot of $ for R&D, you can't just start making electrical cars.
    I can say the same about F1 cars, the tech is out there, just start making F1 cars and build up
    good PR for your car company.

  10. By Gus #10, Posted: 3/20/2008

    My point is that hybrid cars are mostly a publicity stunt at this point.
    If companies get into them, it's merely to satisfy Joe Green who has to have one to show off for his nieghbors, they are NOT about saving the environment or even that much money.
    It costs a ton more energy to build a Prius than it does to build a Corolla, and a few thousenad more to buy one. And if Toyota was to make a real profit, they would be so expensive that they wouldn't sell.
    I'm tired of the BS surrounding the green movement, and I'm tired of haters bagging on anything American because it's a trendy today as owning a Prius.

  11. By Tony #11, Posted: 3/21/2008

    Unless the car will be under 25K they will loose too much. Frankly the design is not so great except for the interior and roof but I highly doubt the production model would look anything like it.

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