Chevy Volt a Failure - GM to Layoff 1,300

The gaga over Tesla is silly to me.

They had more than two years worth of orders built up -- from enthusiasts. And they weren't producing cars.

When you start producing cars and you have a waiting list already, it's convoluted to spin it as demand for the car. This is supply catching up to demand. Not current demand driving supply.

The big questions will be how many of the people on the waiting list actually follow through on their orders -- not just now that they are delivering cars, but over the next yea or two, if the company survives that long. They have had a lot of cancellations, even if they do still have a waiting list they are working off of. Then, when they get through the waiting list, the gazillion dollar question is going to be is there enough ongoing demand, to actually keep driving sales. Otherwise, they will have sold about 10,000 to 20,000 cars and all of the enthusiasts who want one will have gotten their Teslas and the company will be sitting on a lot of debt (it is heavily indebted) and no revenue stream.

They actually had stories about Tesla sales "beating" Mercedes, BMW and Audi. It's amazing how the company sends out that kind of PR and news organizations print it without any kind of critical thinking. Tesla built up a waiting list for more than two years. They kept missing targets about when they would be producing cars. They saddled themselves with debt during that time.

They FINALLY produced cars and start delivering them to people on the waiting list. That isn't current demand. It is pent up demand.

Mercedes, BMW and Audi are meeting current demand. They haven't operated for several years with no significant revenue stream (building up debt), unable to produce cars, built up a waiting list (pent up demand) during that time, and then just satisified that built up demand. Saying Tesla is outselling Mercedes, BMW and Audi is ridiculous. For all anyone knows, the 4,700 people Tesla delivered cars to during the quarter, many of whom were waiting for their car for more than a year, are the only people who will ever want one of the cars.

 

I still question how great a deal the car has been for Justin -- monetarily.

The Chevy Cruze is a gas-powered version of the Volt. You can get one comparably equipped for $18,000. I'd love for Justin to straight up tell us how much he paid for his Volt -- including the tax credit subsidy (and tell us how long before he saw that money back, if he qualified for it).

Then we can actually go through and do some basic calculations that you'd need to determine if monetarily (not the psychic thrill he might get from owning one) he made out better.

What I do know is that given the $32,500 net that most people have paid to buy a Volt, when you factor in a negligible insurance difference (it costs more to insure a Volt) gas would have to cost more than $5 a gallon based on typical driving patterns for the two to be equal in about 20 years. And gas has not approached that level since he bought the car, so you can extend that payback time out.

If you drive the car a ton -- but you are limited by 30 miles per charge, because if you spill over into gas, you are not saving anything -- actually paying more, because the car only takes premium gas -- you can make them equivalents more quickly, but Justin has told us that the car isn't getting driven a lot.

There really isn't a scenario, with gas at current prices, that makes the car financially attractive when you project out ownership over a normal lifespan for a car.

Which is one reason -- there are others, such as the impracticality of having to charge it before you can go anywhere -- the demand has been weak, and would be weaker without subsidies, government purchases and giveaway leases that they counted as sales around election time.