GM Ready to Lose Money on the Volt, Admits Mistake ~ Hybrid Car Review
Hybrid Car Review: GM Ready to Lose Money on the Volt, Admits Mistake

Thursday, March 20, 2008

GM Ready to Lose Money on the Volt, Admits Mistake

GM Vice Chairman Bob Lutz had some very interesting things to say at the New York Auto Show this week.

"We had the technology to come out with a hybrid at the same time as Toyota," Lutz said Tuesday. "In hindsight, it was a mistake. ... We made the mistake and we won't make it again."

"I think the whole company has learned when you step out and do bold things, you win and when you're cautious and let other people do the bold things, you lose," he continued.

Lutz said GM was hesitant to go to market with hybrids a decade ago because the company was likely to lose $250 million a year selling such vehicles. He said that being late to the market with hybrids has cost GM billions in sales because it lost its image of having superior technology.

Lutz was also quoted on the new Chevy Volt, "We won't make a dime on this car for years, and the board is OK with that."

"Ultimately by 2020 we figure that 80% of vehicles will require some sort of hybridization," Lutz said after introducing three new Pontiac sports cars at the New York Auto Show. "We cannot get to 35 miles per gallon with anything resembling the current product portfolio with anything resembling current technology."

He estimated that about 15% of GM's lineup would include hybrids by 2015, with the rate ramping up as the rules phase in before 2020.

Good news for hybrid car fans, for sure. Bad news for GM. But, as Lutz points out, GM has to go through this phase, just as Toyota has. Toyota didn't make money on their hybrid cars for years. Ford will start making a profit this year on their hybrid vehicles. GM will just have to start making it's way through.

Sources: GM's Lutz: 80% of vehicles must be hybrid by 2020 to reach goal | | Detroit Free Press, ABC News: GM: Not Making Hybrid Was a 'Mistake',
GM prepared to lose money 'for years' on hybrid Chevrolet Volt - MarketWatch

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