AD #1997 – GM Will Lose $9,000 on Every Bolt EV, Tesla Fighter Picks Arizona for Plant, Reducing CAFE Could Hurt Industry

November 30th, 2016 at 10:45am

Runtime: 7:12

To watch this episode on YouTube click here.

- GM Will Lose $9,000 on Every Bolt EV
- Akio Toyoda Takes Over Toyota’s EV Efforts
- Lucid Motors Chooses Arizona for Factory
- London to Ban Diesel Buses from 2018
- Ford Develops Windy Tech for Vans
- Elaine Chao Selected as Secretary of Transportation
- Reducing CAFE Could Hurt Auto Industry

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29 Comments to “AD #1997 – GM Will Lose $9,000 on Every Bolt EV, Tesla Fighter Picks Arizona for Plant, Reducing CAFE Could Hurt Industry”

  1. George Ricci Says:

    John,

    Auto companies want to make cars to one standard in the US. In order to back off the 54.5 mpg standard until 2030, aren’t you going to need California and the 11 states that follow California to go alone? How could Trump make that happen?

  2. XA351GT Says:

    I maybe no financial genius ,but I don’t see how you can stay in business losing 9K on every car you make in a certain model. Makes zero sense. I believe it was reported on here that Fiat has to sell 5 gas 500s to offset the costs of one EV 500. Then to add insult to injury no one wants the damn things anyway. It’s a lose ,lose situation that will wind up bankrupting all of them.

  3. Lisk Says:

    Perhaps Lucid should talk to Faraday and take over their plant. No sense digging up dirt in two states.

    If GM is going to lose $9,000 on each Bolt, how can Tesla build what seems to be a more expensive to build Model 3 for the same money?

  4. Alex Says:

    John,

    I agree with your suggestion of extending the CAFE timeline by an additional five years.
    President Elect Trump will need to bring together world leaders and the automotive industry executives to gain consensus on a realistic set of goals and regulation for the entire world wide automotive industry. In this way publish clear and agreed upon guidance which could reduce complexity and market variations in the world wide automotive industry hence reducing manufacturing costs and reduce green house gas emissions.

    You had also mentioned in the pass that the burden of pollution control was placed upon the automotive industry and not on the petroleum industry. Maybe Mr. Trump can re-examine this and shift some of the pollution control burden over to the petroleum industry with certain requirements in the refining, production and distribution of cleaner burning fuels. Americans might pay pennies more per gallon of fuel for this cleaner fuel, however the complex emission device which rob many vehicles of performance and greater fuel economy could be eliminated hence reducing the vehicle cost and maintenance.

  5. Lex Says:

    It is hard to believe that GM is losing $9K for every Bolt manufactured. Does that number factoring in the EV Credits GM receives?

    I predict that Lucid Motors will fall by the wayside against the might of the Tesla brand.
    Once the Model 3 starts to hit the road and Elon Musk gets rid of those silly falcon doors and over extended front windshield on the Model X more consumers will consider leasing or purchasing a Tesla vehicle. Has anyone done a study on sales and durability of CPO Tesla model S vehicles?

  6. MARSHALL Says:

    So in the year 2030 auto manufactures will cease selling new vehicles in California. Simple solution to Cali’s stupid politics.

  7. BobD Says:

    Bolt – There are lots of ways to calculate profit or loss on a vehicle. Is that the incremental/direct cost in excess of the revenue from each Bolt, or are they including development and other expenses that are expense up front, but will be leveraged to future vehicles that will give GM an advantage over its competition that did not invest in the technology?

  8. BobD Says:

    Side Wind Stabilization – It seems odd Ford would use selective braking to keep the vehicle in the lane, rather than corrective steering as used with other “lane assist” technologies. I could see driving a long distance on a windy interstate causing brake over-heating and excessive wear, as well as reduced fuel economy. I’ve had issues with traction-control on my 4WD pickup in snow going up a hill and after just a quarter mile, could smell the brakes from excess “correcting” of slipping tires. Hate to think what would happen driving 500 miles on a windy day.

  9. MikeT Says:

    Backing off the TIMING of the CAFE standards by 5 years will never work. It smacks too much of common sense which has always been incredibly short supply by regulators…

  10. Albemarle Says:

    What a deal! I take the $12,000 CDN that GM is giving away on each Bolt and add it to the $14,000 CDN the Ontario government will give me when I buy a Bolt, and I can buy 2 Nissan Micras at $9,999 each and have change for insurance, winter tires and gas.

    If GM makes enough Bolts, we will ever have to pay to drive again!

  11. Kevin Anderson Says:

    John, Delaying the fuel economy standards to 2030 would have no net benefit. The car companies would have to assume that 4 or 8 years from now, a Democrat administration would get in. The first thing they would do is restore the timeline, since (as you point out) the car companies provide that technology in the rest of the world.

    Kevin Anderson

  12. Brett Says:

    Badmouthing California is silly. They’re so stupid that they would be the 6th or 7th largest GDP in the world if they were a nation. Their stupid, tree-hugging politics have saved countless lives by cleaning up the air in their state and forcing the rest of the nation to follow suit. They are the rest of the USA about ten years from now.

    Consider for GM that it will cost a heckofa lot more to concede the market for affordable, bread and butter EVs to Tesla. Long-term strategic thinking and an appreciation that costs will fall over time.

  13. Tuck&Roll Says:

    Have you forgotten that there are 49 other states? We are not the United States of California. Those nincompoops could float off into the Pacific and would not be missed. There are still 300M other citizens. And I for one, do not believe John went far enough. He should have said 2050 or later. Nothing replaces fossil fuel BTUs. Nothing. These fuel standards are regulatory not USC code. They can be manipulated and changed at whim. How many times have I had to repair my car because of some stupid emissions sensor or valve, I.e. Secondary air emissions system. Plenty or it would not pass emissions test. Stop the insanity!

  14. G.A.Branigan Says:

    I like having a clean fuel burning,fuel efficient vehicle. What I don’t like is all the ‘beta testing’ we do for free,on our money,for emission systems that aren’t quite yet ready for prime time.

    And we as the end users get to foot the bill on all of this. Some of these regs/deadlines is coming out of my pocket. It’s coming out of your pockets.How about giving the oems time to do some serious long term testing on all this new stuff?

    So we tack on a 5 year extension on this stuff.That would give us a better,more reliable efficiency/cleaner emissions with fewer repairs.

    This goes especially for the diesels.They are being hit from every direction for emissions,but they are still more FE than the gassers.They can use the extra time to come up with a more reliable/efficient emissions systems with the same,( or near same), FE.

    JMHO and worth what ya paid to read it…

  15. gary susie Says:

    Those that are critical of the emission standards probably never drove in LA’s or Chicago’s pollution years ago. Breathing that brown air burnt your lungs/.

  16. gary susie Says:

    Those that are critical of the emission standards probably never drove in LA’s or Chicago’s pollution years ago. Breathing that brown air burnt your lungs/.

  17. gary susie Says:

    Those that are critical of emission standards probably never drove in some of our larger cities. Breathing brown air burnt your lungs. Its much better now because of these rules.

  18. gary susie Says:

    Those that are critical of emission standards probably never drove in some of our larger cities. Breathing brown air burnt your lungs. Its much better now because of these rules.

  19. Gerald T Says:

    Does anyone remember when Toyota lost nearly as much as the predicted Bolt loses on the Prius up until a few years ago? How soon they forget…

  20. Chuck Grenci Says:

    $37,500 is not chump-change; with battery costs getting lower and lower, and although there is money needed for electronic controls above and beyond a typical auto, there are a lot less parts needed for electric vehicles (heck, no complicated transmission), I’m thinking maybe GM isn’t loosing money on the Bolt. Admittedly, my comment is mostly speculation.

  21. BARRY RECTOR Says:

    John,

    What’s your take on the report that GM is loosing $9000/per Bolt sold? Did GM price it to undercut Tesla AND beat them to the market with their EV?

  22. G.A.Branigan Says:

    @ 13-16: Yes,I have.Right down the grapevine into the murk.Same with San Diego back in the 70′s.What I’m saying is they push too fast,and we end up with mediocre equipment.

  23. G.A.Branigan Says:

    BTW,didn’t gov moonbeam just sign a bill to control cow farts?

  24. Chuck Grenci Says:

    G.A. #21, in a similar vein, the human population has surpassed 7 billion; perhaps that is crushing the planets resources (not to mention the additional methane). Responsible population control, through education, could be part of the solution. Of course, increased population, contributes to the number of vehicles that can be sold.

  25. Arcade Mike Says:

    I read a few weeks ago that the US emissions from passenger cars only contribute 13% to the problem. Where is the other 87% and why is the auto consumer expected to pay for everything else? They also stated if everyone in North America stopped driving the global emissions would only improve by 3%. Yet we are the problem and we have to have overpriced vehicles and sub par equipment to make a tree hugger here happy. Work on population control, stop cutting down trees like no tomorrow, plug cows so they cant fart, find out how to stop the millions of tons of methane to stop coming out of the ocean floor, and get the rest of the world on the emissions bandwagon and it may get better. Also please move the Trump banter to one a week instead of every day. I feel like im watching CNN. Stop taking everything so literal. Any salesman, CEO, etc always asks for way more than they want then negotiates down to what they wanted to begin with so both parties feel like they got a good deal. Think about it like car buying. No one in their right mind pays sticker but that’s what they ask for. You negotiate $5k less and everyone is still happy.

  26. Kit Gerhart Says:

    16-18 Prius lost money, a lot of money, to start with, but as volume increased, electronics, etc. got cheaper, the car made money by the middle of the 2nd generation.

    The “$9K loss” number is kind of meaningless, without information on how many units/years into production. The tooling is paid over time. Also, batteries will keep getting cheaper.

    Southern California needs strict emissions standards. Rural Wyoming does not. Having common standards good enough for Souhern Ca might be cheaper, overall, than different standards for different parts of the U.S., based on “need.”

  27. Kit Gerhart Says:

    23 Maybe cars contribute 13% of greenhouse gases, but they contribute most of what makes the air unsafe to breathe in a number of cities. There are two different things.

    All of this needs to be addressed globally. I hope Trump will be willing to participate.

  28. DonC Says:

    Jon Bereisa, the former GM executive and power train expert, did a detailed cost breakdown of the Chevy Bolt EV and determined that the factory variable cost (FVC) was $32,500. That’s $5000 less than the Bolt EV’s MSRP.

    So how does this “person familiar with the situation” come up with a totally different figure? Well, FVC is the direct labor and materials cost to build the car. It excludes other costs such as depreciation, sales expense, research, and administrative expense. No doubt you can add $14,000 to the cost if you choose to use some creative cost accounting. However, that’s not usually how it’s done and the Bloomberg article is downright misleading by suggesting, by way of not explaining how cost is being calculated, that the cost is FVC.

  29. Daniel M Albert Says:

    Sad editorial calling for backing off CAFE for 5 years. Not the auto cos. fault that gas prices are so low, but they could easily lobby for higher gas taxes “To Keep America Competitive!”

    Also, any idea how much Tesla is losing per car? Nissan on the leaf?