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Sep 12

The Chevy Volt is not going away, and GM is not losing $49,000 on each one

Quick Facts from Infinite Garage about the Reuters article.
-Reuters says that it costs GM $89,000 to build each Volt
-Reuters then says later in the article that it actually only costs 20-32k to make each Volt. The $89,000 figure includes all research and development costs of the Volt
-Reuters incorrectly says the Volt plant is closing due to weak sales. This is a lie, the Volt plant is closing for retooling because of the 2014 Impala, and GM states it has no intention of stopping Volt production, which is going quite well.

Full article from Infinite Garage about the actual cost of the Volt and the lies of the Reuters article.

The media in this country sucks. It’s just a fact. It’s a small reason why I started IG because you can not get truth any more and the media only focuses on sensationalism and politically motivated content.

For the last week I’ve sat and listened to a certain radio and TV station blast GM, the govt, and unions over the Chevy Volt over what amounts to some really bad math and all out lies. I just can not let these lies about the Volt go on though.

First things first let’s address the elephant in the room. GM is not losing $49,000 on each Volt. What is going on here is some really fuzzy math. Saying GM is losing $49,000 on each Volt is like saying if you bought a new $30,000 car last week and went to the grocery store twice since then each trip to the store cost you $15,000 dollars. That would be really fuzzy math.
Plenty more on this topic after the jump.

Car companies are complicated organizations which is why people who run them get paid as much as the GDP of small African nations. The Volt is the Alpha, not the Omega. The way car companies make money is by developing technology on a platform that will carry over to future vehicles and thus be used for a long time to come allowing GM to recoup the research and development dollars on the Volt for years, even decades to come. It took Toyota a decade to recover the R and D dollars on the Prius. Think of it this way, the small block Chevy V8 has been around for about seventy years in basically the same form as it was at the beginning. It would be wrong to say that Chevy lost money on the first SBC when through it’s long lifespan it has made them many times the profit.

The last thing to address here is the closing of the Volt plant, which Reuters hypothesizes is because of the Volt’s slow sales. This of course is another lie because the plant is actually closing down to retool for the 2014 Impala. The Volt will certainly live on and sales have actually been up this summer with last month setting a record for the Volt with nearly 3,000 sold.

Most importantly though is Chevy has more plans for the Volts drivetrain and platform which means more cars that will be Volt like in the future, including much less expensive ones. This is where GM will really see the R and D dollars pay off.

Sorry to get all political in this post, I do not like doing that because cars should not be political, but IG will not be one of those media outlets that just regurgitates lies from politically motivated media outlets.