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Next-generation Volt could cost as much as $10,000 less to produce

In the world of electric and plug-in hybrid vehicles, the Chevrolet Volt has been the most high-profile entry aimed at consumers. However, the biggest problem for GM when it comes to the current Volt is that the vehicle isn't profitable.

"This car, on a technology scale, is off the charts vs. what you [have] seen," said GM CEO Dan Akerson, who owns one personally. "We've sold about 26,500 of them [and] we're losing money on every one."

Akerson says that the loss GM takes on every Volt that it sales will soon come to an end. The automaker has significant improvement planned for the second-generation vehicle, including making it lighter. Less weight means that the electric driving range can be made extended without adding larger battery packs -- the battery pack on the current generation Volt battery weighs 400 pounds alone.


According to Akerson, GM believes that the cost to build the Volt can be reduced in the range of $7,000 to $10,000 on the second-generation model. That doesn't necessarily mean buyers will see a discount, but it will mean GM doesn't take a loss on each vehicle it sells.

The current Volt has proven to be a hit with owners, as many are claiming they can go as far as 900 miles between fill ups.

Source: Fortune



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RE: Bailout Mentality
By 91TTZ on 5/3/2013 11:31:33 AM , Rating: 0
The people posting about it are not myopic, they just have a business sense. While everyone knows that there's a price to pay for entering a market too late, it might surprise some people to learn that there's also a price to pay for entering a market too early.

For instance:

The cost of computing keeps going down. Parts get cheaper over time. If a company wanted to, they could have made a smartphone like the iPhone in 2004 instead of 2007. The technology was there, it was just more expensive. The problem is that if they made such a phone they would have lost a lot of money. The product would have been a failure even though it would have been ahead of its time. In fact, some smartphones did exist back then but they lacked features, were expensive, and never caught on.

GM had a good electric car way back in the 90's- the EV1. It worked well enough and people liked them but they weren't profitable at all and ended up as a market failure. Ignoring stupid conspiracy theories, the reason for the failure should be obvious- gas was very cheap. Back home, gas was 89 cents a gallon. With gas so cheap, efficiency was the last thing on people's minds.

Gas is now 4x as expensive with no signs of going down, so fuel costs have once again become a factor in people's buying decisions. Even now, the price difference isn't enough for most people to justify buying an electric car, but it probably will in the future.


RE: Bailout Mentality
By zephyrprime on 5/3/2013 12:07:34 PM , Rating: 2
The ev1 was an electric car but I certainly wouldn't call it a good electric car.


RE: Bailout Mentality
By theapparition on 5/3/2013 12:31:06 PM , Rating: 3
While I agree with a lot of what you have posted, this made me lol.

quote:
The people posting about it are not myopic, they just have a business sense.

Do you actually thing the average readership at DT has a clue how to run a business?


RE: Bailout Mentality
By 91TTZ on 5/3/2013 1:31:27 PM , Rating: 2
I'm not sure they have the "whole package" that would be required to run a business, but I'm always surprised in everyday life how some people have absolutely no clue about basic fundamentals regarding money or business. Some posters on here do seem to have common sense regarding that.

While many on this site are fanboys of any new tech (since it's a tech site), it requires a little bit of business sense to realize which ideas are practical and which ones aren't.

I'm surprised that some people on here thought Windows 8 was going to be a hit when it was obvious to me that it would flop.


RE: Bailout Mentality
By Spuke on 5/3/2013 3:11:19 PM , Rating: 2
quote:
I'm surprised that some people on here thought Windows 8 was going to be a hit when it was obvious to me that it would flop.
IMO, I think the "flop" was due to a too early release. If they would've waited till 7 got "old", I think sales would've been better. I expect "blue" to fail for the same reasons.


RE: Bailout Mentality
By 91TTZ on 5/3/2013 3:37:48 PM , Rating: 2
I think the main reason it failed was because they made drastic UI changes that didn't benefit the customer but rather were tradeoffs meant to push customers towards Microsoft's mobile device initiative. People felt that these changes were not necessary, made no sense, and were being "pushed" onto them. Microsoft took choice away from the customer, and the customer kept their money in their pocket.

I said this once and I'll say it again- the Start Button will return to Windows. People thought I was crazy when I said this around Christmas time and even Microsoft said that it was gone for good. But that's not how business works. The customer dictates demand, not the company. The customer spoke loudly and clearly by voting with their wallets and shunning Windows 8. Microsoft, being a business, wants to make sales. They'll get these sales by delivering what the customer wants.

Expect the concept of choice to return to Windows 8. Alongside the Start screen, the option to boot to the desktop and have the Start button will be there.


RE: Bailout Mentality
By Spuke on 5/3/2013 6:41:41 PM , Rating: 2
quote:
I think the main reason it failed was because they made drastic UI changes that didn't benefit the customer but rather were tradeoffs meant to push customers towards Microsoft's mobile device initiative.
I disagree. I think it's much simpler than that. Win7 hasn't even taken completely over the market but MS wants everyone to dump that and go to 8? Nah, I'm not even running 8 at home and I bought it last year. 7 works just fine and I'm positive the average user (and average business) feels the same way. The only people I hear whining about the UI are geeky types. Not one regular person or business has complained to me about it (yes anecdotal but so are the complaints about the UI). IMO, 7 won't get replaced by the average person until after "Blue" IMO when their computers get old and they're ready for an upgrade. And by then I expect people to be buying Win9/10/whatever on tablets.


RE: Bailout Mentality
By 91TTZ on 5/3/2013 9:42:56 PM , Rating: 2
You can't deny that the Metro interface has been a flop. Nobody seems to want anything with Metro on it. Businesses don't want it and consumers don't want it. Sales of Windows 8 have fallen far short of projections. Windows phone isn't gaining much traction. Surface isn't selling well either.

Microsoft has to be scared for their future right now. They made a huge investment to get behind this massive push into mobile and it's fallen flat on all fronts.

A couple months ago I was arguing with many people who denied that Windows 8 was flopping. Now those people have vanished. It's a foregone conclusion by this point.


RE: Bailout Mentality
By Mint on 5/3/2013 4:55:28 PM , Rating: 2
If GM waited they would just be behind the curve. They'd still have to go through the expense of developing technology and parts for the first time and not achieving minimal production cost in their first attempt.

If Nissan delayed the introduction of the Leaf, they wouldn't have hit an MSRP or $29k today. They got there by taking what they learned from the original Japan plant and improving efficiency for the US one. Yeah, the exchange rate was part of their problem, but not all $6k of the reduction.

Parts for novel industries don't get cheaper before they're invented. GM's Volt transmission is unique. Car batteries have different design goals than those for laptops/cellphones. With cars, you want it to last 3000+ cycles, while a laptops won't lose any sales if it's under 500. The appropriate chemistry would be a niche without EVs, so cost reduction would be slow and inapplicable to EV volumes.

This is why it's important to get the ball rolling.


RE: Bailout Mentality
By 91TTZ on 5/3/2013 5:29:18 PM , Rating: 2
quote:
They'd still have to go through the expense of developing technology and parts for the first time and not achieving minimal production cost in their first attempt.


GM and Toyota usually don't develop this technology; they incorporate off-the-shelf technology into their designs.

For instance, if you wanted to build your own cell phone you wouldn't have to reinvent the transceiver, the GPS chip, the processor, the memory, the compass, etc. These things have already been invented by third party companies and you'd incorporate them into your design. Due to everyone else using these parts in their designs the cost of these parts is reduced compared to only a few years ago.

quote:
If Nissan delayed the introduction of the Leaf, they wouldn't have hit an MSRP or $29k today. They got there by taking what they learned from the original Japan plant and improving efficiency for the US one.


While I'm sure they gained some efficiency by building the car for a few years, the main cost savings is in the parts becoming more popular and as a result cheaper. I'm sure that high-power electric motors and high-capacity batteries are cheaper than they were 5 years ago.

quote:
GM's Volt transmission is unique.


I agree that the Volt's transmission is unique since that's not used in any other application.

quote:
The appropriate chemistry would be a niche without EVs, so cost reduction would be slow and inapplicable to EV volumes.


As far as I know, GM doesn't make the Volt's batteries. They use off-the-shelf cells made by LG Chem in Korea. LG Chem (and other companies) had already developed these kinds of batteries before the Volt was thought of.

http://lgcpi.com/applications.shtml


RE: Bailout Mentality
By Mint on 5/3/2013 7:30:28 PM , Rating: 2
quote:
For instance, if you wanted to build your own cell phone you wouldn't have to reinvent the transceiver, the GPS chip, the processor, the memory, the compass, etc. These things have already been invented by third party companies and you'd incorporate them into your design.
That's because the industry has now been established. You didn't have third parties offering off thee shelf parts this before cellphones were commonplace.

quote:
the main cost savings is in the parts becoming more popular and as a result cheaper.
You're just proving my point. The parts wouldn't have become more popular if they held off introducing EVs until costs went down, waiting for someone else to make them popular. It's a chicken and egg problem.

quote:
They use off-the-shelf cells made by LG Chem in Korea. LG Chem (and other companies) had already developed these kinds of batteries before the Volt was thought of.
The Volt started development in 2006, battery testing was in 2008, and production was in late 2010. Batteries technology from LG advanced during that time to win the contract, and even now it continues to diverge from those used in consumer electronics (which prioritize energy density over cost per cycle).

If the automakers just waited for better batteries, we would be well behind in automotive battery tech today.


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