Chevy Volt a Failure - GM to Layoff 1,300

Nothing I have ever written has been about the Model S being a good or bad car.

It's about 1) the unfair advantages the company -- Tesla -- has been given at the unfair expense of others, and the post just now about 2) the fact that the company -- not the car -- is heavily in debt and its current performance, or revenues (most of which don't come from that car, but come from a government emissions credit that Tesla is given by the government and then sells to other automakers which need it to operate) will not be enough to service that debt, let alone justify the current valuations the stock market is giving it.

The Model S, may or may not be a great product. I'm not a luxury sedan person. And I have never been in one and probably never will -- something I think most people on here can say. Like most consumers, I don't have any interest in a car I have to plug in and recharge for limited range, which starts at $70K (or whatever the basic model costs), and works its way up.

But Motor Trend Car of the Year as the barometer? The Chevy Vega, Chevy Citation and PT Cruiser are past winners.

 

da man posted that Barron's article and suggested that it was about Tesla's recent "success." That success (something the article didn't say -- why I posted what I said) would be a ridiculous stock market valuation -- not an award from a car magazine.

But point taken, if that was your attempt at lame semantics. Tesla only produced and sold 5,000 cars in the four years (through the first quarter) since it was given a publicly-funded half billion dollar loan by a country in trillions of dollars of debt.

But it can count being given an award by a car magazine as a success.

 

For the benefit of Uncle Ruckus, that article never called Tesla a success. Presumably you think it has had success because of its current market valuation. But that doesn't make the company a success anymore than pets.com was a success in 1999 before going bankrupt a year or two later. Tesla is heavily indebted. It does not sell nearly enough cars currently to service its debt let alone ever justify those valuations. It's main source of current revenue is emissions credits given to it by the U.S. government, which it then resells to other automakers. And even with that artificial leg up, it will need to create much more income in the coming year and beyond, than it posted in the first quarter, to even survive. Perhaps the company will be a success someday. But it is not one yet.

I am often way too didactic on here, but this time it isn't that I got carried away as I typed. It's that I need to spell out a point in minute detail in this case, so that Uncle Ruckus can understand the my post.

 

http://www.nbcnews.com/business/gm-slashes-chevy-volt-prices-spur-flagging-sales-6C10272201

GM slashes Chevy Volt prices to spur flagging sales
Paul A. Eisenstein The Detroit Bureau

1 hour ago

With signs that sales of its Chevrolet Volt battery car could be coming unplugged, General Motors is offering potential buyers as much as $5,000 in incentives – making it the latest maker to try to cut prices in a bid to boost lagging demand for electric vehicles.

Whether the move will work remains to be seen, as GM has already trimmed the price on the Volt plug-in hybrid. But rival Nissan has had some clear success after cutting the price on its own Leaf battery-electric vehicle, or BEV, earlier this year.

Both vehicles were introduced to high expectations nearly three years ago, but they have so far consistently missed sales targets. Only a handful of battery-based vehicles have come close to meeting expectations, most notably the Tesla Model S.

That might be enough to convince a maker to pull the plug on a vehicle like Volt. But manufacturers like GM and Nissan are under heavy pressure to make their electric vehicle programs a success – at almost any cost – in part because of pressure they face in the nation’s largest state, California, where regulators require all major makers to offer a minimum number of so-called Zero-Emission Vehicles.

A California buyer can now purchase a Chevrolet Volt for as little as $28,495. The base price for the plug-in is $39,995 but all buyers qualify for $4,000 off on a 2013 model and $5,000 off for a 2012 Volt. They also can get an extra $1,000 if they are currently leasing a non-GM vehicle. Meanwhile, the federal government provides a $7,500 tax credit while the state kicks in another $1,500.

A number of other states now offer incentives to buyers of qualifying battery vehicles, as well.

Chevrolet also is now reducing lease pricing for the Volt to $269 a month for 36 months, with a $2,399 down payment.

Initially, demand for the Chevrolet Volt outpaced all its rivals but still fell short of its 10,000-unit U.S. sales goal in 2011 and an even more ambitious target of around 45,000 last year.

For the first five months of this year, GM has sold only 7,157 of what it prefers to call an extended-range electric vehicle, or E-REV. May sales, in particular, fell 4.3 percent, to 1,607. By comparison, the overall U.S. automotive market was up 8.2 percent for the month.

According to a report by Inside EVs, Chevy dealers have more than 9,000 Volts clogging inventories, vehicles they need to clear out before the 2014 models start rolling in.

The downturn in demand presents other problems for GM. The maker had high hopes for its electrification program and has been planning to use the underlying platform for additional models. So far, only two have been identified publicly. The Opel Ampera, a near twin of the Volt, is already on sale in Europe, China and a few other markets.

Meanwhile, GM plans to roll out a more lavish – and significantly more costly – plug-in model next year, the Cadillac ELR. There has been an ongoing debate within General Motors over the original decision to go to market with a relatively mainstream battery-car like the Chevrolet Volt, rather than focus on up-market customers with something like the ELR.

That’s the strategy Tesla has taken with the Model-S for which demand exceeded the start-up maker’s expectations during the first quarter, and which is now outselling the Volt. A well-equipped Model S with a 300-mile battery pack can top the $100,000 mark, yet Tesla has found demand for its high-end version so strong it dropped the least expensive, 160-mile model recently.

Among mainstream makers, however, price is clearly an object of resistance among potential buyers. That prompted Honda last month to reduce the lease price on its new Fit EV by a third, to $259 a month. Nissan, meanwhile, effectively reduced the price of the Leaf by 18 percent, or $6,000, when it launched a new, stripped-down model at the beginning of the year.

That followed 2012 sales that fell well short of target, acknowledged Nissan CEO Carlos Ghosn, calling it, “a disappointment for us.”

Makers like GM and Nissan have promised to reduce battery car prices as the cost of the underlying technology – especially their lithium-ion batteries – falls. GM officials have hinted the next-generation Chevy Volt could be “thousands” less.

But despite the high price tags for current models, buyers are still getting a bargain. Industry analysts have estimated it actually costs GM as much as $75,000 to build each Volt, or nearly twice the base price. While the maker won’t discuss such details, Fiat/Chrysler CEO Sergio Marchionne has publicly confirmed that the company will lose at least $10,000 for each of the Fiat 500e electric vehicles it recently introduced.