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?