After yesterday’s dramatic introduction of General Motors’ Chevrolet Volt , a hybrid-electric car that can drive up to 40 miles using no gasoline, GM COO Fritz Henderson stated that thanks to the Volt’s new technology, it’s unlikely to be a profitable vehicle line until at least the second generation is introduced.
This shouldn’t surprise many; new technologies are tremendously expensive to develop and with GM’s goal of realistic, attainable pricing on the Volt (we’ve heard upwards of $30,000), the automaker was bound to lose money. But if the Volt proves a success and spawns more vehicles with the same technology, GM thinks it’ll have a winner on its hands.
Henderson told Automotive News, “Most of our Gen 1 technologies, I don’t know that I’ve ever seen a situation where we make money, particularly when you load all the costs in. So I don’t necessarily think this is going to be the exception.”
Ever the optimist, GM Vice Chairman Bob Lutz says that he thinks the Volt could turn a profit at some point in its first generation product cycle.
“We’ve made very, very conservative assumptions on battery warranty,” Lutz said. “And that huge lump of battery warranty in the cost calculation helps diminish the profitability.”
