But is the Volt making money?
It’s not easy being green: Volt has provided plenty of material for electric skeptics.
Aside from slower-than-expected sales, one car caught fire after an American National Highway Traffic Safety Administration crash test in 2011.
After the incident, General Motors offered to buy back every Volt so far sold. The NHTSA later ruled there was “no discernable defect trend” and GM made modifications to the battery coolant system to provide further protection from leakage in an accident.
But here’s a problem that won’t go away: the rumour that Volt costs far more to produce than its retail sticker price. In fact, GM executives admit it still sells at a loss but won’t say what the differential is.
It’s a cruel blow when the car has also been promoted with heavily subsidised lease rates in its home market (as low as $US199 a month from some high-volume dealerships) in an effort to boost sales.
Last year, news agency Reuters calculated that GM lost $US49,000 on every car it sold in the US; the base price is $US39,995.
The figure was based on a $US1.2 billion development budget but did not include marketing costs. The notion that Volt costs over twice as much to produce as it sells for is one that’s stuck with the car.
GM responded to the Reuters story with an official statement that called the figure “grossly wrong.” It pointed out that product development cost needs to be apportioned over the life of the vehicle, not just units already sold.
“In addition, our core research … has applications across multiple current and future products... This will eventually lead to profitability for the Volt and future electrified vehicles.”
There will be a second-generation Volt, to be launched in 2015.