Factbox: Estimating costs of making General Motors' Volt

Mon Sep 10, 2012 12:23am EDT

(Reuters) - It costs General Motors Co an estimated $75,000 to $88,000 per car to build the Chevrolet Volt plug-in hybrid, based on current sales and production volume, according to auto industry consultants who spoke with Reuters.

Here is a breakdown of their average per-car cost estimates. Development and tooling are considered fixed costs. Parts and labor are variable manufacturing costs, dependent on production volume.

Fixed-cost figures are based on total Volt sales of 21,500 cars through August, and will drop in the future as sales and production volume increases.

Fixed Costs

* Development: $18,650

* Tooling: $37,350

Production Costs

* Standard Parts, Material and Labor: $12,000

* Unique Parts, Material and Labor: $12,000

TOTAL: $80,000

Note: This does not include marketing and other wider corporate/administrative costs.

(Reporting By Paul Lienert in Detroit; Editing by Martin Howell & Theodore d'Afflisio in New York)

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Comments (2)
ndhawk88 wrote:
Based on the math you are using here, last year, with only 7,700 sales, the cost was $245,000 per vehicle. Sounds like a pretty big improvement. Either that or the math you are using might be a little misleading. The true cost of building a new Volt is 24,000 using your own numbers, plus marketing and other administrative costs. That means they are making money on each new Volt they sell. Quite a different conclusion than is being reported based on these figures.

Sep 10, 2012 11:15am EDT  --  Report as abuse
ShawnTempesta wrote:
The numbers are still flawed here. The development of the Volt cost $1,200,000,000. When you divide that by the number of cars sold (which, Worldwide, is about 26,000) you get the amount of development cost associated with each vehicle. That number, at the moment, is $46,153. That said, GM doesn’t sell the car at a loss. For every car using Voltec technology, the development cost per car goes down, not just for the cars sold today, but every car ever sold.

It’s like if you spent $100,000 building a pizza shop… the first pizza didn’t “cost $100,000 to make”. The building of the shop was an investment necessary to facilitate making rather inexpensive, delicious food, and eventually you’ll make your initial investment back.

Once the Volt sells about 75,000 cars, the development cost will cross that boundary where it, plus the parts and labor, will be under the sales price (not just for cars sold here-in, but all cars sold).

The Volt is outselling the Prius in it’s first two years in America. I’m feeling pretty good about it.

Sep 11, 2012 11:21am EDT  --  Report as abuse
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