Despite selling a record number of Chevy Volts in August, General Motors is losing money on its plug-in electric hybrid, and a lot of money at that.
Industry analysts estimate GM is losing as much as $49,000 on every Volt it produces. This number could be even higher with cheap leases now being offered for the vehicle.
Dennis Virag, the president of Automotive Consulting Group says GM’s problem is “the Volt is over-engineered and over-priced.”
Thanks to some very expensive technology, such as lithium polymer batteries, the Volt has a base price of $39,995. Whether it is the price, or consumers unwillingness to adopt alternative technology, GM has only sold 13,500 Volts so far this year, well below its goal of 40,000 sales in 2012.
Weak sales have forced GM to close the manufacturing facility responsible for assembling Chevy Volts for the second time this year. The closure will start on September 17th and last four weeks.
To date, GM has invested $1.2 billion in the Volt. Although analysts argue to the contrary, Doug Parks, GM’s vice president of global product programs and the former Volt development chief, says the car will eventually make money: “It’s true, we’re not making money yet. As the volume comes up and we get into the Gen 2 car, we’re going to turn (the losses) around.”
Image credit: GM