Monday, September 10, 2012

How Toyota Could Bury GM In One Easy Step

... just buy a bunch of Chevy Volts.
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. GM on Monday issued a statement disputing the estimates.
If Toyota and the rest of the auto industry bought enough of them, they could drive GM into bankruptcy.


B-Daddy said...

Is that loss based on the marginal cost or average cost to build the Volt? A friend who explained the dynamics of the auto industry said that a major chunk of the costs to produce a car are in setting up the production line. Very low sales volume = high losses. Buying more Volts might reduce the losses.

tim eisele said...


According to the Detroit Free Press, GM says that the outrageous loss level that Reuters published includes not only line set-up, but also all of the sunk R&D costs. So yes, if everybody went out and bought a Volt, it would improve GM's finances, not hurt them.

K T Cat said...

I figured that was the case, but the headline was too funny not to write. Having said that, everyone is not buying the Volt and the thing remains a money-losing toad.