The man widely credited as being the “father” of the Chevy Volt, Bob Lutz, was recently quoted as saying that he’d be “surprised and shocked” if the 2017 Chevy Bolt ended up being profitable, according to recent reports.
It should be noted here up front that Lutz no longer has access to GM’s internal financial figures, so he’s merely speculating. GM has previously stated that the Bolt would be profitable, and that it is paying LG Chem just $145 per kilowatt-hour (kWh) for the battery cells that’ll be used in the all-electric (EV) Bolt.
“I no longer have access to General Motors figures, but I would be surprised and shocked if the 200-mile electric Bolt is going to make money,” stated Lutz (this was at an Automotive News roundtable back in August). “You look at the cost per kilowatt hour of batteries and the number of kilowatt hours they have got in there and then you look at the selling price. It’s just not going to work.”
The GM Volt website provides more:
His comments have gone largely unreported as they were part of an over 1.5-hour-long video on a subscription only industry site. The frank and revealing insiders’ discussion was between auto industry “superstars,” Bo Andersson, Arndt Ellinghorst, John Krafcik, Bob Lutz, Tim Manganello, and Andy Palmer.
…Agreement was voiced by others in the crosstalk, but Lutz made more strong statements about whole product lines being hurt by compliance cars, as automakers can look at plug-in hybrids and all-electric cars. Even if they are sold nationwide, these vehicles make up less than 0.75% of the US, market, and do not keep the lights on for major automakers burning through cash. On the other hand, trucks, SUVs and crossovers are where General Motors and other automakers make their most substantial profits.
With gas prices declining, automakers have been booking ever increasing sales for these types of vehicles while working on electrified cars because they must meet regulations. This, said Lutz, has cost everyone, even the truck buyers, as he blamed electrified vehicles that cost as much to develop as other vehicles, but make much fewer sales.
“I don’t know if anybody noticed, but full-size sport-utilities used to be — just a few years ago used to be $42,000, all in, fully equipped. You can’t touch a Chevy Tahoe for under about $65 (thousand) now,” he stated. “Yukons are in the $70 (thousands). The Escalade comfortably hits $100 (thousand). Three or four years ago they were about $60,000. What this is, is companies trying to recover what they’re losing at the other end with what I call compliance vehicles, which are Chevy Volts, Bolts, plug-in Cadillacs and fuel cell vehicles.”
So, essentially, what Lutz is doing is (partly) blaming electric vehicles for the rising prices of gas-powered SUVs, trucks, etc. Readers may disagree with me on this, but I’m very skeptical that that’s the root cause…
The solution to the issue, according to Lutz, is for multiple automakers to collectively work together on the creation of compliance cars — rather than front the development costs independently.
“Yeah,” stated Lutz, “Just do one fuel cell vehicle and have about 6 companies each participate in the architecture so that at least they might attain a volume of maybe 100,000, so that everybody can have their 5,000 or 6,000, which they’re going to need to comply with California.”
One fuel cell vehicle, huh?
But even if B. Lutz is right, is that a problem? Electric cars becoming more developed and SUVs becoming more expensive is most likely a win-win for the environment in the long run. If the biggest polluters on the road are essentially helping to fund what will grow to be the cleanest automobile fleet, that sounds like a pretty good turn of events.
I don’t think he understands supply and demand. The rising cost of SUV’s is because that’s what the market will allow. Guys like this are why American car companies innovate so slowly. Well, except for Tesla, of course.
Newsflash: An ex-GM guy wants multiple brands to build slightly different versions of the same car! This is the same Lutz under whom GM invented the skateboard design and then did nothing with it. I’m sure a lot of folks at GM are happy that Mary Barra holds the reins.
SparkEV cost analysis: SparkGas 1LT = $15K. Replace gas engine with electric motor may incur 10% higher (probably not, but conservative estimate). At $300/kWh, 19kWh battery = $5700; round up to $6000. Then total for SparkEV is
$15K * 1.1 + $6K = $22.5
Chevy is selling SparkEV in Mexico for $24K.
Let’s do similar for Bolt, based on Sonic. MSRP = $16K, 10% premium for motor/controller in place of gas engine, 50kWh battery at $300/kWh:
$16K * 1.1 + 50 * $0.3K = $32.6K
Chevy plans to sell the Bolt for $37.5K AND the battery is less than $200/kWh (pack, not just cells). So how is it that Sonic can turn a profit, but not Bolt? If anything, Bolt should give >20% profit for Chevy.
Lutz must think there must be some magic in EV that makes them expensive. Fact is, it’s only expensive if they don’t make enough of them or they don’t sell well due to poor performance and marketing.
Let’s hope gm doesn’t squander their oportunity. The spec is promising. Now they _have_ to fix the charging network as well.
The Chevy Bolt will sell well initially, a strong demand. Why? in addition to private car owners, governments will be buying the Bolt. The federal, state, county, and municipal levels of government have been buying alt fuel vehicles, hybrids and the like, for a number of years now. Also, the Bolt will be the only affordable 200 mile EV that is from an American car company, and government agencies only purchase American cars.
Sooo… the model 3 isn’t American enough or not affordable enough?
The Tesla Model 3 probably won’t be available until 2018 or 2019 based on past history. It will sell well also to government agencies, once it is available for sale.
as far as i know Elon has said still on target for march 2016 model 3