Chevy Volt costs $80K to build? Not true, says GM

Late last year, the Internet went wild with the «news» that each
Chevrolet Volt that was built
cost taxpayers $250,000. That figure was
completely untrue, of course, but the question of how much
GM is paying to make each Volt is as close to a perennial one as we have ‘round these parts when it comes to the new
generation of plug-in vehicles. The latest figures, which come to us via «auto industry consultants who spoke with Reuters,» suggest that, currently, each Volt costs GM around $80,000, or at least somewhere between $76,000 and $88,000.

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. Reuters says GM has invested an
estimated $1.2 billion into the Volt program so far and when you divide $1.2 billion by the 21,500 Volts sold in the U.S. so far, you get $56,000. This does not take
advertising and marketing costs into account, or the number of Volts (and
Opel Amperas) sold overseas. In response, GM issued a statement clarifying just how much Reuters is relying on current sales numbers to get to the $80k number, saying, Reuters’ estimate is «grossly wrong.» The full statement is available

What GM isn’t saying is how much, exactly, it costs to make a Volt. But Doug Parks, GM’s vice president of global product programs, did admit that the Volt is a losing proposition, financially. He told Reuters, «It’s true, we’re not making money yet. … [It] eventually will make money. As the volume comes up and we get into the Gen 2 car, we’re going to turn (the losses) around.»

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GM Response to Reuters Story on Chevrolet Volt Development Costs


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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