GM willing to lose money on Volt
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.