Lets do some simple break-even analysis. With a $1B investment and a 10% cost of capital, fixed costs are $100 million/year. Lets assume a 5% margin, which would give a $2,000 margin on each car, so the company would have to sell 50,000 cars to break even.
Year to date sales have been a measly 13,500.
The above analysis is probably way too optimistic.
Price is lower: many of these sales are made at discounted 2-year leases as low as $199/month, which translates to $5000 over the two year lease. And development costs may be as high as $2B.
Which gives us the unfortunate answer:
It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. That's nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama's green energy policy.
So why are we (does the Government still own GM?) making this investment?