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General Motors Loses Nearly $50,000 Every Time It Sells A Chevy Volt

The Chevy Volt, the mostly electric car that President Obama, and General Motors officials, have touted as the future of the American car industry, is a massive money loser that any sane businessman would stop making immediately:

Sept 10 (Reuters) – General Motors Co sold a record number of Chevrolet Volt sedans in August – but that probably isn’t a good thing for the automaker’s bottom line.

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.

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.

GM’s basic problem is that “the Volt is over-engineered and over-priced,” said Dennis Virag, president of the Michigan-based Automotive Consulting Group.

And in a sign that there may be a wider market problem, Nissan, Honda and Mitsubishi have been struggling to sell their electric and hybrid vehicles, though Toyota’s Prius range has been in increasing demand.

GM’s quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs – which will be difficult to bring down until sales increase.

But the Volt’s steep $39,995 base price and its complex technology – the car uses expensive lithium-polymer batteries, sophisticated electronics and an electric motor combined with a gasoline engine – have kept many prospective buyers away from Chevy showrooms.

Some are put off by the technical challenges of ownership, mainly related to charging the battery. Plug-in hybrids such as the Volt still take hours to fully charge the batteries – a process that can been speeded up a bit with the installation of a $2,000 commercial-grade charger in the garage.

The production cost of a Volt is nearly twice that of the other vehicles in the General Motors fleet, and it’s sales are far below any of those other models as well. The idea that these production costs will go down as more Volt’s are sold, a possibility that seems dubious at best given the appallingly bad sales record of the Volt, makes little sense at all. The production issues here have nothing to do with things that become suddenly less expensive once you start mass producing them, especially when you’re talking about a battery that is expensive to produce because of the material needed to make it.

We’ve known for awhile now that the Volt was a boondoggle, and this is really just further confirmation of that fact. More0ver, assuming electric cars do become more common GM will have to deal with competition from other companies. Already, Nissan has the Leaf which, while similarly expensive, has received far better reviews than the Volt from folks in the car industry. On the other side of the coin, there is the distinct possibility that the cost of ownership of an electric vehicle will grow even higher than it currently is if the cost of energy sources such as natural gas start to rise, something that seems inevitable now that natural gas resources are being exploited for a wide variety of uses.

If you’re a businessman and you’re losing $50,000 on every sale of a certain item you manufacture, shouldn’t that tell you that you’re doing something wrong? Shouldn’t it, perhaps, tell you that the idea of building the rebirth of your company on such a product is a mistake? We were told after the bailout that we’d see something new from Detroit. With the Volt, all we’re seeing is more of the same bad business decisions that got Detroit in trouble in the first place.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. superdestroyer says:

    I hope that all of the people who criticized the big three for selling SUVs instead of small compact cars will not bother to comment on this. A car company is in the business of making a profit (no matter how many progressives want to ban profits) and there is no profit is electric cars.

    Of course, electric cars have been promised for 30 years (or more) and still do not work that well.

    Poorly-rated. Helpful or Unhelpful: Thumb up 2 Thumb down 19

  2. Alex Knapp says:

    Highly-rated. Helpful or Unhelpful: Thumb up 39 Thumb down 0

  3. JKB says:

    Relax, the Volt is dead after November one way or another. If Obama wins, then killing the Government Motors boondoggle won’t matter to him any more. If Romney wins, he’ll apply business logic and let them kill it to save the company. Of course, if the latter happens, we’ll see lots of MSM stories about the workers put out of a job over the plant closings. If the former, just crickets.

    Poorly-rated. Helpful or Unhelpful: Thumb up 2 Thumb down 28

  4. DC Loser says:

    The Volt was intended as a flagship technology demonstrator for GM to claim to be in the lead of a mass produced electric car. It didn’t want to cede that to the Japanese or any other manufacturer. It had invested billions on the project for the past few decades. According to that Forbes article, it may or may not be making money, but that’s not the point. With the experience of producing the Volt, GM will be in a much better position to design follow on vehicles with the proven Volt technology. We know the prices for the components like the batteries will come down in time, and with mass production efficiencies, it will be profitable in the long term. There is no way oil prices will come down to the levels of the past, so this is a good bet for the long term survival of the company.

    Highly-rated. Helpful or Unhelpful: Thumb up 21 Thumb down 0

  5. Murray says:

    Once again your ideological preferences are getting in the way of your common sense.

    The link provided above by Alex will show you that Obama and tree hugging lefties are not the only defenders of this project.

    Highly-rated. Helpful or Unhelpful: Thumb up 23 Thumb down 1

  6. C. Clavin says:

    Take America Back…to the 19th century.
    Doug, do all Republicans posing as Libertarians believe progress is profitable right out of the box? Or is that your own personal fantasy? And how is that stable of Unicorns in your backyard?

    Highly-rated. Helpful or Unhelpful: Thumb up 19 Thumb down 2

  7. Clavin,

    You don’t succeed in business by losing $50,000 per unit. It’s that simple. GM either needs to go back to the drawing board, or give up the ghost on a car that, quite obviously, most people are not interested in buying.

    Poorly-rated. Helpful or Unhelpful: Thumb up 2 Thumb down 46

  8. John H says:

    So, the real story is that it’s not as successful as it’s promoters hoped, but not as disastrous as it’s detractors think? Shocking, late-breaking, top of the page news, this one.

    Like or Dislike: Thumb up 5 Thumb down 0

  9. JKB says:

    @John H:

    Whether they lose $50,000 a unit or $60,000 is only an indicator of how fast GM will go bankrupt. If the development investment was to learn new technologies, it is still a loss unless that is turned into a product that can be sold at a profit. Since the product can’t be sold at a profit but rather is sold at a steep loss, you cut your losses and shut down production. The knowledge has been gained, but you sometimes have to write off sunk costs. Unless that will be bad optics for cronies in government.

    Mid-November, the Chevy Volt will cease production. And we’ll know, it was political and who is responsible if GM goes into bankruptcy again.

    Oh, by the way, all that mal-investment in the Volt took investment money away from productive activities that would have resulted in jobs.

    Poorly-rated. Helpful or Unhelpful: Thumb up 3 Thumb down 23

  10. @Doug Mataconis:

    You don’t succeed in business by losing $50,000 per unit. It’s that simple

    But is it? I am not a Volt booster or anything (for one thing, I do not trust GM products), but it seems to me that the discussion of this product (in general, not just here) is being radically over-simplified (see, for example, Alex’s link).

    Also: lots of things are reported to be a “loss” in the press (didn’t we have a story here about movie accounting the other day?) and yet it is usually based on one particular interpretation rather than the true overall costs and benefits of a given business venture. Indeed, the value of a particular investment is often more than what is being made on a per unit sale.

    Highly-rated. Helpful or Unhelpful: Thumb up 17 Thumb down 0

  11. @Steven L. Taylor:

    Oh I’m sure GM can cook the books to make the Volt look profitable if they really wanted to. The one thing they cannot cook, though, are the Volt’s dismal sales. People simply don’t want the thing.

    Poorly-rated. Helpful or Unhelpful: Thumb up 0 Thumb down 32

  12. @Doug Mataconis: Yes, and I am not surprised because it is a new technology and this is a huge investment to make for an individual. But I am not talking about cooking the books. I am talking about things like waht DC Loser notes above:

    With the experience of producing the Volt, GM will be in a much better position to design follow on vehicles with the proven Volt technology. We know the prices for the components like the batteries will come down in time, and with mass production efficiencies, it will be profitable in the long term

    If that is true, then the investment (and the cost/benefit) is not just about this vehicle. If there is, in fact, a future in these types of cars (and there appears to be one) then there is going to be a lot of initial sunk cost and experimentation. This has to be accounted for in assessing the situation.

    Highly-rated. Helpful or Unhelpful: Thumb up 17 Thumb down 0

  13. Will they?

    The Leaf, by all accounts, is far better technology than the Volt from what I’ve read.

    What you’re describing to me is more the idea of the Volt as a concept car, which is a fine idea. But, as a business matter, for GM to try to pretend that its the Volt that will save their company is to willfully ignore their actual sales figures, which clearly show that consumer preferences go in a completely different direction.

    Poorly-rated. Helpful or Unhelpful: Thumb up 1 Thumb down 23

  14. Interesting story, and good actually that you used the picture from the 2006 Detroit Auto Show.

    I remember keenly, as a 2005 Prius buyer, when that concept vehicle was shown, and the unrealistic promises that ere made for it from the start. In 2006 everybody was asking GM why they’d Killed the Electric Car, and why they didn’t have a hybrid. So they made something up and the crowd went with their promises.

    It worries me a bit that now was like then though. The crowd at that point accepted GM assertions that Toyota lost money on every Prius they sold. I don’t think that was true.

    So, while not a Volt fan, I doubt these figures “which could be as large as” (always hedge words) are actually quite that large.

    And I don’t think a saga starting in 2006 is really Obama’s.

    Highly-rated. Helpful or Unhelpful: Thumb up 19 Thumb down 0

  15. @Doug Mataconis:

    You don’t succeed in business by losing $50,000 per unit.

    Which is why it’s a good thing GM isn’t doing that. The marginal production cost of a Volt is not $50k more than the selling price as the article says. The reporter is taking the development cost and dividing it by the number of currently sold cars, which is not how financing works.

    Suppose I spend $1 million dollars developing a new widget, which I can make for $1 and sell for $10. If sell 10,000 of them per year, you can’t come in year two and go “OMG, Stormy Co is spending $51 to produce a widget that sells for only $10! This product is a failure!”

    Highly-rated. Helpful or Unhelpful: Thumb up 59 Thumb down 0

  16. Shorter: The Volt was never a great design, but it’s not really Obama’s devil car.

    (The fundamental technical problem with the Volt is that it needed a new generation of high capacity battery technology. That would have been fine if the battery tech could have been found before the car went into production. One thing you can’t do is ship with current battery tech and hit reasonable price-performance, but that’s what they’ve done anyway. So of course it costs too much. A dream battery has never been found, and this affects all manufacturers. Other manufacturers just make milder hybrids, with lower capacity batteries.)

    Like or Dislike: Thumb up 0 Thumb down 1

  17. Alex Knapp says:

    Doug,

    The entire point is that they’re not losing $50,000 a unit. The Reuters reporter doesn’t understand the accounting. All he did was take ALL of the initial R&D costs, subtracted revenues, and divided by the number of Volts sold.

    Put this a different way. Let’s say a pharmaceutical company spent $1 billion in R&D into a new drug. After the first year, let’s say they sold 100 million pills at $1 a pill. Based on the Reuters accounting method, you’d get:

    $1 billion – $100 million = $900 million / 100 million = a $9 dollar loss per pill!

    But that’s stupid. Because the pharma company knows they’re going to be selling the pills over a long timeframe. And of course, the money sunk into the research also opens up new possibilities for research and provides other ancillary developments like new research techniques.

    When you’re looking at R&D costs, you need to look long-term, not short-term. This isn’t rocket science. This is Business 101.

    Highly-rated. Helpful or Unhelpful: Thumb up 48 Thumb down 1

  18. @Stormy Dragon:

    So Stormy, imagine that I wanted to sell solid gold fry pans.

    Right now it would be hideously expensive. Should I just start anyway, on the assumption that gold will become cheaper?

    (That’s not really a unfair comparison, given hybrid battery dependence on rare earth metals.)

    Like or Dislike: Thumb up 1 Thumb down 7

  19. @Doug Mataconis: I am just not convinced that you perspective is accurate. First on the cost per vehicle thing, as best I can tell, Stormy Dragon is right:

    The reporter is taking the development cost and dividing it by the number of currently sold cars, which is not how financing works.

    If this is the case, then the number from the Reuters piece is a distortion.

    Highly-rated. Helpful or Unhelpful: Thumb up 23 Thumb down 0

  20. Alex Knapp says:

    Hey Stormy, looks like great minds think alike.

    Like or Dislike: Thumb up 8 Thumb down 0

  21. @Alex Knapp:

    The entire point is that they’re not losing $50,000 a unit. The Reuters reporter doesn’t understand the accounting. All he did was take ALL of the initial R&D costs, subtracted revenues, and divided by the number of Volts sold.

    LOL, that EXACTLY what the critics did with the Prius.

    It ignores that the tech part of the equation can be reused forever. Toyota is making it’s 4th or 5th members of the Prius family right now.

    So that part of the claim is definitely BS.

    Highly-rated. Helpful or Unhelpful: Thumb up 18 Thumb down 0

  22. Alex Knapp says:

    (To be fair, the Volt might lose money in the long term. But they’re not losing $50K per car right now.)

    Like or Dislike: Thumb up 13 Thumb down 0

  23. Doug, buddy, you could just read the link Alex sent and admit you were wrong. The marginal cost each Volt sale is breakeven or even slightly positive. Most of that $50,000 per car “loss” is sunk cost. In that situation, their best bet is to continue to sell as many as they can to amortize that investment over a longer production run.

    You’re sounding like those leftwingers who are always complaining about the cost of weapons systems, then insist on cutting production, only to see the “per unit” cost rise now that fixed costs are spread over fewer buys.

    Highly-rated. Helpful or Unhelpful: Thumb up 30 Thumb down 0

  24. @Doug Mataconis:

    You can price the battery component of the Leaf versus the Volt very easily, with Wikipedia.

    Leaf Battery – 24 kW·h lithium ion battery

    Volt Battery – 16 kWh lithium-ion battery (2011/12)’

    So the embedded battery cost in the leaf should be 50% higher. Being a fully electric car, you drop the engine cost, of course.

    Like or Dislike: Thumb up 1 Thumb down 0

  25. @john personna:

    (That’s not really a unfair comparison, given hybrid battery dependence on rare earth metals.)

    It is, because the apparent loss is not a result of the production costs (e.g. labor and materials); it’s due to the R&D costs. Whether the Volt is ultimately a success will depend on whether, over the entire production lifetime of the line, they sell enough to amortize those R&D costs enough to make the car profitable.

    However, even if they don’t, those R&D costs are already sunk, so in terms of whether or not to keep the line going, the only question is whether the cost to produce and additional Volt is less than what GM can sell it for, and the answer to that question is already yes.

    Highly-rated. Helpful or Unhelpful: Thumb up 15 Thumb down 0

  26. Franklin says:

    Looks like a massive headline failure. Not entirely Doug’s fault, though, it was the typical Reuters article quality we’ve come to expect.

    Like or Dislike: Thumb up 3 Thumb down 1

  27. @Stormy Dragon:

    We aren’t justifying a research program here. Of course every manufacturer should research hybrid and electric cars. We are, or should be asking, whether a plug-in hybrid, with 16 kWh lithium-ion battery was appropriate to material costs in 2010-2012.

    Neither is the question “should GM have done a hybrid?” Many other manufacturers have started with milder hybrids and had much less trouble.

    Consider how much smarter Honda and Toyota (later Ford) have been by starting with small hybrids, which by their nature have lighter battery requirements, and then climbing the hill over time.

    Where is GM’s Prius or Insight class hybrid?

    Where resources correctly allocated?

    Like or Dislike: Thumb up 0 Thumb down 0

  28. (As an aside, my 2005 Prius is turning 110,000 miles and I’ve gotten 53 mpg on the last three tanks. Pretty amazing, right?)

    Like or Dislike: Thumb up 4 Thumb down 0

  29. @john personna:

    The question isn’t whether GM should invest $1 billion on the developing the Volt. That ship has sailed. The question is whether they should keep making them. From Doug’s article, the Volt sells for $39,995 and costs $32,000 to make. That’s clearly a profitable car. The headline is only happening because they’re trying to amortize $56,000 of R&D costs into the car, which as previously noted is not how financing works.

    Highly-rated. Helpful or Unhelpful: Thumb up 15 Thumb down 0

  30. ptfe says:

    @Doug Mataconis: And we know you’re not a math major. Did you read the link that Alex threw up there? The Reuters piece is…um…challenged. Try to understand the difference between these two:

    Eq 1: (R&D cost + production cost*number produced)/number produced – sale price = loss/vehicle

    Eq 2: (R&D cost – (sale price – production cost)*number expected)/number expected = loss/vehicle

    The first one always trends downward very slowly, especially at the beginning of a production run; the second one should be 0, give or take a bit depending on how you expect the lifetime market to look.

    Let’s take the Prius as an example. In 1997, the Prius was introduced in Japan. Here’s how that accounting went after a year (it was introduced in Dec 1997, so we’ll just do the ’98 numbers):

    R&D cost: $1bn (source)
    Number sold: 17,700
    Production cost: Unknown — I’m guessing 2m Yen, based on the margins = $15,400
    Sale price (1997): 2.3m Yen = $17,700
    Initial expected production: 120,000 over 5 years (it’s hard to get a read on this number from the documents available, but the original production was 1000/mo, with an expectation to move to over 2000/mo within a year; I’m assuming that, similar to other auto manufacturers, Toyota was projecting for 5 years)

    Eq 1: loss/vehicle = $54,200
    Eq 2: loss/vehicle = $6,000 (!)

    So, yeah, taking the short view always looks really, really bad, which is why nobody does it because otherwise you’d never do R&D. Taking the long view looks far better. And note that the Prius is now a massively profitable car because Toyota tooled up to produce even larger numbers than it originally planned due to high demand starting in 2000. It was also sold for more on the European and U.S. markets, so profitability increased even more.

    Also note that the Volt has sold over 26,000 units worldwide since its Dec 2010 release, which is pretty much dead on the pace of the Prius in its first 21 months. Conclusion: Call us back in 5 years, then let us know what the total loss per car is.

    Incidentally, @john personna, in 2005 the Prius (based on the above math) was probably just about breaking even per sale — if you included the R&D costs and Gen 2 development costs. But Toyota knew it had a winner and was still scaling up production. It’s probably made the company back that development cost 4 times over by now.

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  31. Not to hijack the thread, but I started to type another response, and it turned into a post.

    Like or Dislike: Thumb up 7 Thumb down 0

  32. rjs says:
  33. PJ says:

    Does anyone actually think that gas powered cars are still the future?
    Does anyone actually think that GM doesn’t need to move towards building cars that run on electricity to stay in the game?

    I doubt that there are any sane businessmen in the car industry who do.

    But I guess those who do can add the R&D costs to the cost of producing the Volt.

    And these insane businessmen can then continue to build gas guzzlers and wait for their companies to go under. Because they will.

    Like or Dislike: Thumb up 9 Thumb down 0

  34. @Stormy Dragon:

    Do you need the Federal tax credit to make the Volt work?

    (I don’t have any problem with killing all auto buying tax credits and then letting things sort themselves out.)

    Like or Dislike: Thumb up 0 Thumb down 0

  35. @ptfe:

    I know that critics ascribed a loss to Toyota in that time frame, and Toyota said “no, we are now in the black.”

    Given that their hybrid program was by that time 8 years in production, I tend to believe them. The Prius I being introduced in Japan back in 1997.

    Like or Dislike: Thumb up 1 Thumb down 0

  36. ptfe says:

    @john personna: That corresponds roughly with where the math says they should have turned around — around 350,000-450,000 production units, depending on your assumptions. Regardless, once they went positive, they went very positive, since they were significantly increasing production (20,000 per year of the first few years up to 125,000 per year in 2004, and now something like 400,000+ per year).

    I know that there were a lot of criticisms early on, especially from companies hell-bent on producing bigger cars for the U.S. market, but the reality is that the $1bn isn’t far off of what it costs to produce a genuinely new line of cars, regardless of the drivetrain. But the Prius was a big gamble for Toyota: it was losing market share in the mid ’90s and didn’t have a Plan B (according to the managers involved). I doubt it would have killed the company to have the Prius flop, but it would have been pretty damaging.

    Like or Dislike: Thumb up 1 Thumb down 0

  37. Mike Smitka says:

    As per many comments, not only is most of the $50K represented by sunk costs, but those costs were incurred before the collapse of auto sales, that is, under the Bush administration. It’s easy to go back and find Bob Lutz and others touting the Volt in pre-production phase during that era.
    Now volumes are disappointing — but that’s a function of our lower gas prices which finds deaf ears for any sales pitch based on energy savings.

    Like or Dislike: Thumb up 6 Thumb down 0

  38. @Mike Smitka:

    We can run some TCO’s via Edmunds:

    2011 Ford Fusion Hybrid 5yr Cost to Own: $41,003

    2012 Chevrolet Volt 5yr Cost to Own: = $53,038 – $7,500 tax credit = $45,538

    It REALLY needs that tax credit, right?

    Like or Dislike: Thumb up 0 Thumb down 0

  39. Carson says:

    I have seen information about a new motor that runs on magnetic power. You tube has many videos that show how this works and how to build one.

    Like or Dislike: Thumb up 0 Thumb down 0

  40. michael reynolds says:

    It’s all a part of libertarian hysteria over the GM bail-out. Is there a clearer case of ideologically cooked books than this? The right is simple desperate to prove their case against GM. Americans so ideologically blinded that they are rooting for the destruction of an entire American industry.

    At the point where you’re hoping your fellow Americans fail, pause, take a step back, and rethink your ideology.

    Highly-rated. Helpful or Unhelpful: Thumb up 26 Thumb down 0

  41. @PJ:

    Does anyone actually think that gas powered cars are still the future?
    Does anyone actually think that GM doesn’t need to move towards building cars that run on electricity to stay in the game?

    For quite some time, gas is going to part of the equation for the vast majority of cars. The big sticking point for all electric right now is that it takes hours to charge them (even with the “fast” charge station, it takes the Volt 4 hours to recharge). That means they can only really be charged overnight, greatly limiting the market space. Anyone who doesn’t have reserved parking right at their residence has no place to plug it in (which ironically eliminates the urban market where electric cars make the most sense). And you can’t use the car for long distance travel (you think the hotel is going to let you run an extension cord across their parking lot?).

    All electric won’t really be feasible until charge times come down to 10-15 minutes so that they can be charged in something analogous to a gas station. And even when that comes, now you have a chicken and egg problem. No one will by the cars if there’s no charging stations and no one will build charging stations if there’s no cars.

    Like or Dislike: Thumb up 2 Thumb down 3

  42. @Stormy Dragon:

    All electric won’t really be feasible until charge times come down to 10-15 minutes so that they can be charged in something analogous to a gas station.

    It’s been a while since I’ve done the math, but I think REALLY fast charging times, line a minute or two, require a megawatt of charging power.

    Like or Dislike: Thumb up 0 Thumb down 0

  43. anjin-san says:

    This is Business 101.

    Well, that’s where you lost Doug.

    Like or Dislike: Thumb up 12 Thumb down 0

  44. C. Clavin says:

    @ Doug…
    This is the same thing you do with the stimulus.
    X jobs were created. The sitmulus was Y dollars. So each job cost Y/X.
    But that is simple-minded analysis that ignores tons of other factors in order to make what is clearly a partisan point for you.
    The more I read your stuff the more it is clear that a). you do not understand business or economics or b). are such a partisan hack that you don’t care if you look like you do not understand business or economics..

    Like or Dislike: Thumb up 11 Thumb down 0

  45. PJ says:

    @Stormy Dragon:
    While I agree with the issue about charging times and availability of charging stations, other factors may force people to change their driving behavior long before fast recharging batteries etc becomes a reality.

    And the primary factor here will be the price of gas.

    Like or Dislike: Thumb up 3 Thumb down 0

  46. tps says:

    @PJ:

    Until they come up with something that provides the same power, storage ability, etc that internal combustion does the answer is yes. Can they make them better? Sure. Ceramic engines that can tolerate high temperature with less need for coolients, a gas-turbine/electric, etc.

    Like or Dislike: Thumb up 0 Thumb down 0

  47. @john personna:

    It’s been a while since I’ve done the math, but I think REALLY fast charging times, line a minute or two, require a megawatt of charging power.

    As I said, fully electric vehicles are not going to be widespread for a long time. If I take myself as an example, I live in a condo with no garage, but I have offstreet parking. I can’t really run an extension cord across the lawn from my home to where the car is parked. I could put a charge station at the curb with an underground line to it, but then what happens if someone takes my spot? How do I stop people from freeloading off my electric bill? And that’s in a suruban setting. How’s it going to work in an urban setting where most people have on-street parking and may end up a block away from their home on a giving day. Or people who live in high rise apartments? Overnight charging just isn’t feasible for a sizeable chunk of the population.

    Like or Dislike: Thumb up 2 Thumb down 0

  48. matt says:

    @john personna: My 95 del sol has a bit over 160k miles on it and I’ve gotten on average 36 mpg the last three tank fulls (a full tank lasts me a month between school and work).

    Not bad for a car that is almost 20 years old? Oh and the AC still works :P

    Like or Dislike: Thumb up 0 Thumb down 0

  49. @matt:

    That’s pretty amazing too. Crazy how long engines last these days.

    Like or Dislike: Thumb up 0 Thumb down 0

  50. matt says:

    @john personna: For sure and I’d like to think a large part of that is my careful maintenance.

    I used to have an old 307 from a 72 nova that had well over 200k miles on it (the previous owner said 300k and the title said +100k many years before I acquired the car). I threw some junkyard upgrades (four barrel quadrajet aluminum intake rebuilt HEI and more) for giggles. The motor sounded strong and aside from a really minor valve seal leak the motor burned only gas. With a 2.77 rear end I as getting about 25 mpg driving to college through the country. I swapped the motor and the rear end out some years later but last I knew the motor was still running hard. This all despite the former owner being a dumb kid who over revved the motor many times…

    Like or Dislike: Thumb up 0 Thumb down 0

  51. matt says:

    @john personna:So basically I agree with you and wanted to share the luck that I’ve had with some motors. Now on the other side I had a 305 (one of the worst motors ever) monte carlo that was from the mids 80s and the last cylinder in the bank would burn so much oil the plug would foul out and then it’d run roughly on 7 cylinders. I haven’t had any luck with american 4 bangers either but those were also from the 80s.

    Like or Dislike: Thumb up 0 Thumb down 0

  52. pseudonymous in nc says:

    @Doug Mataconis:

    You don’t succeed in business by losing $50,000 per unit.

    On the same erroneous calculation, Mercedes has been losing money per car on the S-Class, the flagship of its range which serves as the testing ground for technologies that eventually work their way down the model lineup until they become standard. Clearly, they haven’t heeded the Mataconis warning.

    (They lost $500k per car on that basis with Maybach, which has been shuttered without providing much in the way of technology.)

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  53. pseudonymous in nc says:

    @Stormy Dragon:

    Suppose I spend $1 million dollars developing a new widget, which I can make for $1 and sell for $10. If sell 10,000 of them per year, you can’t come in year two and go “OMG, Stormy Co is spending $51 to produce a widget that sells for only $10! This product is a failure!”

    You don’t even have to be hypothetical: pretty much every prescription medication sold under commercial patent follows this model.

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  54. Chet says:

    @john personna: What are you talking about? Lithium is one of the most abundant elements in the Earth’s crust.

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  55. Broseph says:

    Doug, does it ever occur to you that there are other options than doubling down or running away. You could gracefully acknowledge the error in the Reuters piece. This could increase your credibility. Not everyone has to mcmegan things.

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  56. GeneJockey says:

    In my businees – the Biotech side of Pharma – if we calculated the profit/loss per unit the way you’ve calculated ‘Losing $50,000 per Volt’, the first dose of any drug we sell would lose $800,000,000 dollars. Eight Hundred MILLION dollars lost.

    Fortunately, Mr. Mataconis, nobody in business thinks like you do, or they’d be out of business right quick.

    What I do not understand is when innovation became a bad thing to Conservatives.

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  57. Corey says:

    You also don’t succeed in business by mixing up average and marginal costs.

    Idiot.

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  58. Bob says:

    Mataconis is dishonest and misuses/misunderstands figures in a way that slams Obama/carries water for Romney? Shocked!

    Always remember: Mataconis is a dishonest partisan hack. Everything he writes has to be viewed with that in mind.

    Like or Dislike: Thumb up 11 Thumb down 2

  59. gex says:

    @Franklin: So what is the value added here? Why do we read this “expert” punditry when the guy doesn’t seem to understand the ideas behind R&D, investment, or long term amortization? My 4 year old niece can simply pass along whatever she heard from someone else.

    He’s basically making the argument that no one should ever start a business. Because your up front costs are bound to be more than your first sale or even first several sales.

    It’s bad enough, a libertarian failing to understand what the problem in the Reuters article was. To take that, pass it on to possibly a new audience, and then REFUSE to correct the obvious mistakes in the claim that has been made not once, but twice now.

    Wow. That’s so helpful. There’s a reason I don’t read libertarians (ETA: Came here from Balloon Juice link). It’s the sloppy thinking. Well, the most generous reading of it is that it is sloppy thinking. One could look at how this distortion of details on product that went into production before Obama was president is now suddenly a ding on Obama and see something more dangerous to the republic than sloppy thinking. Lies from people who are “informing” us.

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  60. Shygetz says:

    I don’t have a major problem with Mataconis swallowing an implausible story that reinforced his existing preconceptions. It reveals a lack of judgement, but one that is sadly very common. What is truly damning is his inability to admit fault and edit his preconceptions when presented with conflicting evidence.

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  61. Barry says:

    Steven ! I’d strongly recommend leaving OTB. IT’s rapidly turning into a ‘point and laugh’ site.
    You’ll suffer by association.

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  62. gVOR08 says:

    Throught the Impact and EV1, GM has been working on electric vehicles going back to 1990. Maybe the Volt, or a successor will be a success, maybe not. But I’m sure it will all be Obama’s fault to some.

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  63. Rick Almeida says:

    I just want to take a moment and point out how quickly Doug ran away from the thread after being proven completely wrong. It’s not the first time, but it will be the last time, until the next time.

    Like or Dislike: Thumb up 8 Thumb down 0

  64. Barry says:

    @Rick Almeida: “I just want to take a moment and point out how quickly Doug ran away from the thread after being proven completely wrong. It’s not the first time, but it will be the last time, until the next time. ”

    He’ll be back, with some irrelevant or simply dishonest comment, and then duck away again.

    Like or Dislike: Thumb up 7 Thumb down 0

  65. Zach says:

    Hey, thanks Doug for not coming back and updating this post to mention that it’s worthless. And for ignoring comments once you apparently figured it out.

    Like or Dislike: Thumb up 10 Thumb down 0

  66. Seitz says:

    @Zach:

    I agree with the sentiment. Doug’s refusal to acknowledge his error is really embarrassing.

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  67. Bobby D says:

    No retraction of the original misleading story, no admission of completely misunderstanding the facts, no correction, no engagement with the commentariat after being proven embarassingly wrong.

    Leads me to another set of “no”s. No honestly, no value added, no clue.

    I fail to understand what, exactly, Mr. Joyner believes Mataconis adds to this website. There is an abundance of hackish, knee jerk, reflexively argumentative, GOP water carrying “libertarian” commentators.

    I though OTB was a little higher class than all that, but unlike Mr. Mataconis, I can admit when I’m wrong.

    Like or Dislike: Thumb up 2 Thumb down 0

  68. Barry says:

    @Bobby D: “I fail to understand what, exactly, Mr. Joyner believes Mataconis adds to this website. There is an abundance of hackish, knee jerk, reflexively argumentative, GOP water carrying “libertarian” commentators.”

    I think that James has succumbed to the temptation to let Doug be his ‘attack dog’.

    I also think that James is wrong in succumbing.

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  69. Franklin says:

    @gex: Guess I was feeling generous, I thought Doug might walk it back but he failed to do so.

    Just FYI, though, Doug does do pretty good legal analysis when the situation comes up (Supreme Court decisions, for example). And despite what some have said above, he’s not a partisan hack. I’ve been reading him here for a few years now, and while there’s the occasional slop (as in this case) and other things I would strongly disagree with, he’s not a partisan hack.

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