The 2011 Chevrolet Volt, which was revealed today, likely will not turn a profit for GM due to both its expensive development and what the company expects to be considerable warranty costs.
GM rarely sees a profit on first of its kind cars, and thinks the Volt to be the rule rather than the exception, company COO Fritz Henderson said today. Product chief Bob Lutz added that GM is assuming it will have to replace “quite a few” of the Volt’s first-of-its-kind lithium-ion-batteries. If that turns out to be true, GM might not profit on the Volt regardless of how many it sells, given that warranty costs would escalate with higher volumes.
But GM has made “very, very conservative assumptions” about the battery, Lutz said, adding that if the batteries last longer than estimated, the car may yet prove a moneymaker.
Source: Automotive News