GM responds to story on Chevrolet Volt development costs

Article by Christian Andrei, on September 11, 2012

As you remember, yesterday we told you General Motors is losing as much as $49,000 on each Chevrolet Volt it builds and it appears that this information bothered the American company. As a result, GM released an official statement saying that Reuters' estimate of the current loss is grossly wrong due to the fact that the reporters allocated product development costs across the number of Volts.

Apparently, there is a mistake there, because GM says that the development costs should be allocated across the lifetime volume of the program, which is how business operates. Moreover, the research into battery cells, battery packs, controls, electric motors, regenerative braking and other technologies has applications across multiple current and future products.

This will help GM spread costs over a much higher volume, thereby reducing manufacturing and purchasing costs. It appears that GM is quite positive about it and hopes this will lead to profitability for the Volt and future electrified vehicles. Now, if Reuters was wrong and GM is right, you decide.

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