Volt/GM = D.O.A.
MSM Double Negative on Volt?s Chances of Success
The numbers for the Chevrolet plug-in hybrid electric Volt?running costs
vs. the competition and the manufacturer?s margin?don?t add up. Never
did. Right from its inception, GM was demurring on the timeline for the
theoretical vehicle?s theoretical profitability. Early adopters, economy
of scale, yada yada yada. Even after GM?s prearranged a $7500 tax credit
with Uncle Sugar?an outrageous tilting of the playing field in the
former bankrupt?s favor?the Volt remains a guaranteed, sure-fire money
loser. Even if the price of gas soars, the Volt will not be an economic
proposition. These facts have been largely lost on the mainstream media
(MSM), whose mypoia for all things green and beautiful has blinded them
to the equations that will seal its fate. And even when they do crunch
the numbers, they refuse to see the light. To wit CNNMoney. Make the
jump to do the math. Otherwise, GM?s headlong rush down the obfuscation
highway has a new champion: ?So it?s not impossible that the Volt could
become a sales success, even if the strict dollar analysis does not work
out for it.?
Driving a typical 14,000 miles a year, or 38 miles a day, the Prius
would use about 280 gallons of gasoline.
With gas at its current price of about $2.65 a gallon, that would
come to about $742 a year in gas, or $421 more than the Volt owners
would pay if they can stick with electricity.
Even if gas goes back to the record high of $4.11 and stays there,
gassing up a Prius would cost about $1,150 a year, giving the Volt an
$830 a year cost savings.
But a Prius costs $25,428, on average, according to sales data from
Edmunds.com, while GM will probably have to spend $40,000 or more to
build each Volt.
While Volt buyers will get a $7,500 tax credit that reduces the
still undisclosed purchase price by that amount, the fact is that GM
will have to subsidize much of the remaining $7,000 difference in cost
to make it competitive with the Prius.
At current gas prices, the $421 a year savings over a period of six
years that a new car is typically owned, would mean that a Volt would
only be cost competitive with a Prius if was about $34,500 before the
That means GM would have to take about a $5,500 loss on each Volt
if it is to be strictly competitive.
If you assume modest sales of 20,000 Volts the first year, that
would mean about $110 million in additional losses for the cash-strapped