GO MOBILE WITH INSIDER ILLUSTRATED
SUMMARY
This week we look at two MIT projects: a study supporting the implementation of a $20 a ton carbon tax to help dig America out of its deficit, and the Hiriko 'urban' CityCar. We also highlight Eva Hakansson and her home-built KillaJoule streamliner motorcycle and 11 hybrid cars that are cheaper to own than their non-hybrid counterparts.
26 PAGES : 3.50 MB PDF



INSIDER ILLUSTRATED EDITION 12.37

No Accounting for Volt's 'Ugly Math'

The ‘ugly math’ headline was bound to grab everyone’s attention when Reuters ran an article last week citing an auto industry analyst who claimed GM was losing $49,000 on every Chevy Volt they sold, asserting that the car easily cost the company $89,000 to build. Naturally this caused a media feeding frenzy; even we carried the story, but only to alert readers to it, not to agree with it. Quickly GM and others responded from bloggers to GM Vice President of Global Product Programs Doug Parks who acknowledged, “It’s true, we’re not making money yet... eventually (Volt) will make money. As the volume comes up and we get into the Gen 2 car, we’re going to turn (the losses) around.”

But it was Bob Lutz who adroitly shot down in flames the $89K argument, laying out, in general terms, how much the Volt likely costs from his experience in the auto industry, concluding, while it is “still ‘under water’….but not by much, and less and less so as the volume builds and other, higher-margin GM cars, like the Cadillac ELR, piggy-back off of the Volt’s initial investment.”

He adds one final burst from his well aimed guns, “So, once again, the knee-jerk Volt bashers, devoid of any real knowledge, have had their usual joyous verbal catharsis, but the car doesn’t care: The volumes are building globally and it’s doing exactly what it was designed to do.”

CONTINUED.....

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