Last September when Reuters calculated that General Motors Company (NYSE:GM) was losing almost $50,000 on every Chevy Volt it sold the carmaker was apoplectic with indignation at the “grossly wrong” numbers being thrown around. Sure they were losing money, every new technological advance does, but as they built more cars and then released Volt 2.0 they would become profitable.
Well, General Motors Company (NYSE:GM) has certainly built more Volts over the last six months or so and they’ve even sold a few more, too, but then so has Tesla Motors Inc (NASDAQ:TSLA) and Nissan (OTCBB:NSANY). In fact Tesla sold more of its all-electric Model S cars in the first quarter of the year than General Motors Company (NYSE:GM) did with its Volt, and Nissan turned itself around enough so that its LEAF outsold the Volt in March.
We’ll get the April sales numbers in a day or so to see if any traction has been made as spring has gotten under way, and if General Motors Company (NYSE:GM) was able to recover from March sales plunging 35%. One thing hasn’t changed month to month and that is that the Volt is still a money-losing proposition for GM and for the taxpayers who bailed it out.
In a presentation yesterday, CEO Dan Akerson admitted General Motors Company (NYSE:GM) is still losing money on every Volt sold and will continue to do so for the foreseeable future. So what’s the solution? Not to admit defeat, that’s for sure, at least certainly not when the taxpayer is still nominally footing the bill for your company. Nope, what you do is double down and say you’re going to make even more of your money-losing cars than you did before and you’re going to make them even cheaper than they are now!
Akerson didn’t say how much General Motors Company (NYSE:GM) was losing on each Volt, but he did say that if it ever hoped to make a profit on them the carmaker would need to cut as much as $10,000 from the cost of production. That, however, won’t be happening until the next-gen model is introduced, which won’t be until 2015 or 2016 at the earliest.