Chevy isn’t losing $49,000 on every Volt it sells, for God’s sake | Grist
Ill let the International Business Times explain what the hell Im talking about.
General Motors Company loses as much as $49,000 per Chevy Volt it builds, according to one news organizations report, but the article is not as self-evidently accurate as it may first appear.
General Motors has sold approximately 21,500 Volts since the gasoline-electric hybrid was introduced in December 2010, and development costs of the high-tech car are estimated at between $1 billion and $1.2 billion by Reuters calculations. Production costs for the Volt are estimated at between $20,000 and $32,000, a wide margin to be sure. The Volt retails for a base price of $39,145 (before a federal tax credit of $7,500).
The issue with Reuters math, though, is that it only takes into account the 21,500 Volts sold so far, as if GM would never sell another one. If that is taken to be true, then each Volt sold has cost GM around $55,000 in development costs.
Every hater basked in the Volt losing $49K per car, like there were executives of Exxon or something. However, the calculation is well overblown and misguiding. That figure takes into account the $1.2 billion invested to create the technology! Of course putting that R&D dollars used to discover the product is going to create a deficit. HOWEVER, if you take that out of the question: GM nets $7K-19K on each model sold. That is only off the base, add extras and they make more.
Most new like the cell phone, PC etc showed deficits the first year when you considered the R&D costs.
The Volt is a step in the right direction and everyone liberal and conservative should embrace it!