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Thread: GM Losing Up To $49,000 Per Volt

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    Re: GM Losing Up To $49,000 Per Volt

    Gillette spent 750 million dollars developing the mach 3 razor, making the loss on the first 10,000 razor's sold as much as $74,990 bucks per razor. Drug companies spend as much as 11 billion developing a new drug. Does that mean the first 11 pills cost the company 1 billion each?

    I do believe that GM is mishandling the economics of the car (if anything not pricing it low enough to steal some prius loyalty), but you don't completely change a 100 year old car culture in two years and you certainly don't try to calculate final ROI on a program until the program is terminated. Even then that doesn't account for the complete value of the R&D as portions of it are likely to be used elsewhere for years.

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    Re: GM Losing Up To $49,000 Per Volt

    That's what happens when the government goes into business.

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    Re: GM Losing Up To $49,000 Per Volt

    i wonder what a financial flop internal combustion powered automobiles were in 1900. Karl Benz should have hung it up so that we could stick with horses.

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    Re: GM Losing Up To $49,000 Per Volt

    Quote Originally Posted by The Man View Post
    I'm surprised Obama doesn't pass a law requiring every American to buy a Volt, or pay a tax penalty.
    He can't do that.

    The Republicans didn't think of it first.
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    Re: GM Losing Up To $49,000 Per Volt

    Quote Originally Posted by Darroll View Post
    That's what happens when the government goes into business.
    First Obama buys GM with tax payer money, with a lose of over 20+ billion and then Obama forces GM to build the Volt, another loser, so what do you expect. He never ran a lemonade stand.
    Liberals - Punish the Successful, Reward the Unsuccessful
    Liberals - Tax, Borrow, Spend, and Give Free Stuff
    Obama's legacy - President Donald Trump

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    Re: GM Losing Up To $49,000 Per Volt

    Quote Originally Posted by pdog View Post
    Gillette spent 750 million dollars developing the mach 3 razor, making the loss on the first 10,000 razor's sold as much as $74,990 bucks per razor. Drug companies spend as much as 11 billion developing a new drug. Does that mean the first 11 pills cost the company 1 billion each?

    I do believe that GM is mishandling the economics of the car (if anything not pricing it low enough to steal some prius loyalty), but you don't completely change a 100 year old car culture in two years and you certainly don't try to calculate final ROI on a program until the program is terminated. Even then that doesn't account for the complete value of the R&D as portions of it are likely to be used elsewhere for years.
    Apples and oranges. The article mentions the parts and labor cost to produce the car, not R&D.

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    Re: GM Losing Up To $49,000 Per Volt

    Quote Originally Posted by jonny5 View Post
    Apples and oranges. The article mentions the parts and labor cost to produce the car, not R&D.
    Try again:
    Quote Originally Posted by http://www.chicagotribune.com/business/breaking/chi-gm-losing-up-to-49000-per-volt-20120910,0,5279427.story?page=1&track=rss
    It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said.
    Quote Originally Posted by http://green.autoblog.com/2012/09/10/chevy-volt-costs-80k-to-build-not-true-says-gm/
    That 80k breaks down this way: Each Volt currently has $56,000 in fixed costs – $18,650 in development costs and $37,350 in tooling costs – as well as $24,000 in parts and labor, according to the consultants. With each Volt sold, the $56,000 will drop by a little bit, but it's a slow process.
    Quote Originally Posted by http://green.autoblog.com/2012/09/10/chevy-volt-costs-80k-to-build-not-true-says-gm/
    GM Response to Reuters Story on Chevrolet Volt Development Costs

    2012-09-10

    DETROIT – Reuters' estimate of the current loss per unit for each Volt sold is grossly wrong, in part because the reporters allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program, which is how business operates. The Reuters' numbers become more wrong with each Volt sold.

    In addition, our core research into battery cells, battery packs, controls, electric motors, regenerative braking and other technologies has applications across multiple current and future products, which will help spread costs over a much higher volume, thereby reducing manufacturing and purchasing costs. This will eventually lead to profitability for the Volt and future electrified vehicles.

    Every investment in technology that GM makes is designed to have a payoff for our customers, to meet future regulatory requirements and add to the bottom line. The Volt is no different, even if it takes longer to become profitable.

    GM is at the forefront of the electrification of the automobile because we are developing innovative technologies and building an enthusiastic – and growing – customer base for vehicles like the Volt.

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    Re: GM Losing Up To $49,000 Per Volt

    Another day another misleading thread about GM.
    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

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    Re: GM Losing Up To $49,000 Per Volt

    It seems to me, that if you are designing something to compete in a market, you make it... competitive.
    The price point of the Volt, even with the tax credits, is above it's market value.
    People in that market, might ask what the payback curve for buying a volt?
    Someone early on should have done a cost budget analysis, and decided what the
    market price point was to sell a lot of these new cars.
    If they could make them for low enough to still make a profit great,
    if not, stop the project while you are ahead.
    Maybe use your research elsewhere.

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    Re: GM Losing Up To $49,000 Per Volt

    Quote Originally Posted by pdog View Post
    Try again:
    "The actual cost to build the Volt is estimated to be an additional $20,000 to $32,000 per vehicle (nice range estimate), according to Munro and the other industry consultants.” - frome the article. The 49k number is with R&D, the 20-30k number is without.

    Try again.

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