2016 Chevrolet Volt Will Be Profitable

JAN 29 2015 BY ERIC LOVEDAY 82

2016 Chevrolet Volt - Image Credit: Tom Moloughney/InsideEVs

2016 Chevrolet Volt – Image Credit: Tom Moloughney/InsideEVs

From day one…

The crew over at GM Authority spokes with Mark Reuss, General Motors’ executive vice president of global product development during the 2015 North American International Auto Show.  It was during this roundtable interview discussion when Reuss revealed that General Motors reduced the cost of the next-generation 2016 Volt by some $10,000 per vehicle, as compared to today’s Volt.

Here’s how GM Authority explains it:

“In a roundtable interview with Mark Reuss, General Motors’ head of product during the 2015 North American International Auto Show, a lot of questions popped up about the all-new 2016 Chevrolet Volt, of which we asked him a few. One thing he assured is that the Volt 2.0 will indeed make General Motors money this time around, as the developers behind the car found a way to subtract around $10,000 in costs per vehicle. This should also make it easier to attain one, as the MSRP of the 2016 Chevrolet Volt is expected to drop significantly compared to the outgoing model as a result. Pricing won’t be made official for some time, however.”

With $10,000 in costs per vehicle removed, the all-new 2016 Volt will be profitable from the start.

2016 Volt LTZ Silver Ice Metallic - Click To Enlarge

2016 Volt LTZ Silver Ice Metallic – Click To Enlarge

Source: GM Authority

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82 Comments on "2016 Chevrolet Volt Will Be Profitable"

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Wow, that’s a big reduction. I’m glad that GM made the car profitable – that will make it more appealing to sell them. On the other hand, as a consumer, this is a red flag. If I were in the market for one, I might wait a year to make sure they didn’t jeopardize anything. The Gen I Volt is a solid vehicle. Historically, cost cutting measures often results in lower quality. I sure hope that doesn’t turn out to be the case here.

“We took a third out of the car. Still runs great!!!” 😉

Red Flag? GM? Naaaaaaw. 😉

Actually, they improved on it while also reducing cost. It’s called engineering.

+$1

They certainly improved most of the specs of the car, at least on paper. My concern is not whether the car is an improvement, but whether quality has suffered. I am personally going to reserve judgement on that, and hope for the best. I’m not in the market for a new car, but if I were the conservative in me might wait a little longer to see how things pan out.

As an engineer, I am very skeptical of the first version of any vehicles. It is amazing the Volt 1.0 is as reliable as it is.

The $10k cost number sounds big, but a big chunk (maybe half) will be the reduction in battery costs. I also see the new interior costing less as it doesn’t have as many materials that are unique to Volt.

I am sure they are expecting some reduction in cost due to higher volume.

In the end, leasing instead of buying cuts the risk way down anyway.

Good points. A friend of mine reminded me that GM also removed a good amount of rare earth materials from the motor. I had read that in passing but it had slipped my mind. That must account for some savings too. Plus, the integration of the electronics saves on both materials and manufacturing complexity. It all adds up. Still, $10k is a big number.

I too am an engineer. In my experience, the first generation is usually over-engineered. The problem is that it may be over-engineered against problems that aren’t so bad, while other issues are neglected. The second generation will pull back on some things, and fix problems where they show up on Gen I. The Gen I Volt has almost nothing to fix, which is great. I just hope they don’t introduce unforeseen issues while trying to reduce costs.

“The problem is that it may be over-engineered against problems that aren’t so bad, while other issues are neglected.”

This is spot on. The real world bring out the problems the white board and planned out testing can never find.

Sidenote: We seem to have an disproportionate amount of engineers here compared to the general population.

Increased sales volume will also lower the cost. Looks like the redesigned engine/motors are also cheaper to make and install. I too am concerned about the effect cost cutting on this scale has on build quality and design integrity.

True, that just proves they over-engineered the Gen 1.

And they could save even more by trowing that crankshaft thing overboard, the gearbox and all the clutch thing. Just a battery a motor a controller and a present time direct free piston generator with double the efficiency and compacity. That would all add up to a big extra saving for an even better performance.

I’d love to believe that but what I suspect he means is that we have written off a whole heap of the costs associated with development of a new model and factory to build that model against Gen 1 so Gen 2 is now a whole lot cheaper.

It’s called accounting, it probably employs more people than engineering and defiantly saves more money than engineering ever will…… well at least on paper 😉

That’s a pretty negative way to look at it. Here’s a more positive way: Now that GM has amortized away much of the startup cost of the 1st generation Volt away, the 2nd generation can actually make a profit.

But as others have noted, a reduction in battery price is also a significant chunk of that $10k savings.

I always thought the Voltec drivetrain was overly complicated. Perhaps they found a way to simplify that?

Anon, this is very typical in high tech offerings. Sorry that you don’t understand.

This continues to happen with computers, flat scree TV’s, cellphones, etc.

Let us both watch the recall list for this vehicle then, shall we? 😀

Tell me a year after release, what I don’t understand, then. 😉

Well, for the first generation Volt, the count remains at four. As in, one two three four.

Your bias only shows that you continue to try and find reasons to justify why you dislike GM, rather than viewing the facts with an open mind.

ClarksonCote wrote:

“Anon, this is very typical in high tech offerings. Sorry that you don’t understand.

This continues to happen with computers, flat scree TV’s, cellphones, etc.”

Good grief! Cars are not electronics. Building cars is heavy industry; building computers and TVs is light industry.

Tesla Motors was founded by people who thought they could build cars the way Silicon Valley builds computers. The road to learning better was a long, hard one for them. Let us not make the same mistake.

Cars WERE NOT electronics, but the Volt largely is. The cost reductions come mostly from improvements in battery technology, and reduction in rare earth metals in the motors.

Battery technology advancement and cost curves have been closely following electronics cost and tech curves, so I would beg to differ, since that is where the majority of these cost reductions come from.

I wonder if they saved some money by not having 27 microcontrollers in the new volt.

Besides being very buggy, they also don’t talk to each other adequately. In my 2011 if I run out of gas, the thing will run the fuel pump until it burns out (why can’t they either shut the thing off or make it run dry 24 hours a day no problems?), while the rest of the car gives you 6 messages you are low on fuel and or the engine doesnt work and requires servicing.. I didn’t know how true that statement was.

The volt is the first car made in my lifetime that you can get the battery go dead by listening to the radio. Perhaps with fewer silly computers, the thing won’t drain the battery so much.. They never heard of CMOS?

I am sure the gen 2 Volt will not have only 27 uPs. The gen 1 has 100. 🙂

How can you possibly kill the Volt battery with the radio? The radio, and other 12 V loads, turn off after about 10-15 min if the HV battery and DCDC are not running.

GSP

To paraphrase Mitt Romney.

Let Exxon go bankrupt.

Stopping all the subsidies that they receive, including the military help to secure the oil routes, the exceptions they get to pay for the pollutions they cause and an end to the total absence of a carbon tax they still enjoy, that only will be enough to get them bankrupt. There is even no requirement to have better ev cars, the end of the above will do.

I know a few years ago Ackerson was promising $10k in cost reduction for Volt 2.0. But it is still amazing to hear they actually accomplished this. MSRP at $29,999 would do wonders for sales.

$29,999 for base and $34,999 for the LTZ would be incredible.

+1 I’m going with this, too, but I hope they let us doll up the LTZ even more. I won’t be disappointed if heated SW and seats are an additional $500, or if they decide to throw in 6.6kw charging for $1k. This is a car that limited, higher margin buyers exist for, whether $29,999 or $39,999. Heck, for $49,999, an “L” version might have given me the itch, too.

Reports are this electric car is still only has 3.3kw charger and no quick charge.

3.6kW, up from 3.3kW.

No QC.

If they can get the MSRP close to $29,900, I will forgive the 3.6 kW charge rate! I have to admit that it would be nice to charge at 6.6 kW, but GM does have a point when they say a BEV may NEED to charge faster, an EREV doesn’t. You always have the genset.

BEV’s need the faster charge rate more. This is true. So why doesn’t the Spark EV have a 6.6 kW charger?

I am sick of hearing that “EREVs can always burn gas instead.” I did not pay extra for an “EREV” to burn gas like any old 20th century car. I paid to use electricity instead of gas, and I want an OPTION to pay for 6.6 kW charging, and DC fast charging as well.

GSP

I want a 6.6 charger. Will pay extra for it. just like the Nissan Leaf and Tesla have optional charger sizes.

Although I charge my Volt at home on 240V, there are simply not enough other Volt drivers doing the same to make 6.6kW charging a worthwhile option.

Keep in mind that if 6.6kW charging is possible, the electrical systems and batteries for ALL Volt would need to be built to handle 6.6kW. They aren’t going to design two entirely different batteries and electrical systems.

Last I heard they do make 32 amp fender j1772 jacks reliably and cheap. As far as water cooling 2 -16 or 1 – 32 amp car charger, I went through those calculations on an earlier blog and the existing facilities will handle it no sweat. Other people have said a 6.6 kwcharger on a battery about 3 times the kwh capacity (1/3 C) is not a big deal. Oh, and to interconnect the fender jack with the charger module(s) they invented #10 AWG copper wire about 150 years ago. Dime a foot. If they still can’t figure out how to do it maybe the Fit EV people will let them take a look. The fact is all Volt owners buy 2 things they never ever need. 175 amps for the ‘alternator lookalike’ is overkill when 60 amps would easily handle the loading, 1/3 the size. THey also don’t need a huge 12 volt battery which supposedly was contributory toward a fire in a rearend collision when a dinky 12 volt, 10 ah motorcycle battery would be fine and less of a fire hazard since they could put it in a small box like they put the 20 ah one… Read more »

It will be interseting to see how big the 12 V battery is on the gen 2 Volt.

GSP

COULD GM figure out how to get 6.6kW in the Volt? Sure. But they can figure out how to get 3.6kW in more cheaply, which is the point. As far as the alternator and battery go, it’s obvious that the gen1 Volt was overengineered in many aspects. We’ll see what’s in the gen2.

Furthermore, as to your claim that “97% of the customers of the volt could utilize 32amps/6600 watts”: the bottom line is that they aren’t. If a higher percentage of Volt drivers WERE actually charging on 240V at shopping malls, then GM would have seen that and considered implementing 6.6kW. They are not.

Finally, the elephant in the room… 6.6kW charging is totally irrelevant unless one of two things is true:

1) The Volt driver has a L2 charger at home (which the overwhelming majority do not)

2) Available public L2 chargers are free

Commercial rates for using L2 chargers (e.g. $0.49/kW from ChargePoint) is not even remotely competitive with the most expensive gas we’ve had in America. $5/gallon gas is cheaper per mile.

If you carefully read what I wrote, then to object to what I said, you would have to provide proof that someone who charges at 110 at home NEVER, in the life of the car with them, EVER charges at a Public Station, whether free or pay, not even once.

That said, if you’ve been reading my posts over the years I have no real problem with GM providing 3300-3600 watts of charger. I am saying that its a ‘kick in the head’ that they wasted money on things people can’t possibly use, and they could have , for instance provided a 6000-6600 watt charger that many customers would use, including occassionally the majority who charge at 110.

I like my VOlt enough that if it was only possible to charge at 900 watts (basically the default rate of 8 amps), I would still buy the car even with the micro 900 watt charger.

As a Volt owner, I have no need for faster charging. I do have 240V and the car charges every night from 230-630A.

I think you are hitting on a point I hear discussed by Utilities all the time.

My post above shows how it would be easy money wise to change 2 expensive things which are never needed in the car, for a 6.0 to 6.6 kw charger.

However Utilities always say they want charging to take up the WHOLE nightime.

You may say a supercharged Tesla uses up the electrical facilites for about 100 volts, at least those charging at 110, and some of them at 900 watts.

From the utility’s point of view though, those teslas are charging at COMMERCIAL RATES, which they are paying demand fines for.

Conversely, with the volt, these are predomanently charged at home under residential rates.

Perhaps GM would get an earfull if they made and agreement with Utility Groups never to use more than a 15 amp charger at home.

You’d think there’d be a good reason NOT to have a larger charger, but then again, I wonder if the new volt has a smaller battery and smaller alternator replacement, since those things needlessly caused extra expense in the GEN1 volt.

As another Volt owner, I also do not need faster charging. The 3.3 kW is great for overnight charging.

I also do not need: A/C, radio, nav, leather seats, onstar, garage door opener, and lots of other stuff that I enjoy having and will pay for. All I need is reliable transportation.

A fast charge option would not be used for overnight charging, but it would make the Volt more desireable to more customers.

A standard dual-voltage 120/240 V charge cord would also make the car more desireable, cost-effective, and useful.

GSP

I don’t know about you, but I would not consider buying a car without A/C and a sound system. And most of the other things you listed are options, so if you have them, you chose them.

Based on charging stats, a 6.6kW charger wouldn’t even make the Volt more attractive to the majority of people who already have one, much less people who don’t.

Wow! With such a cost reduction, does it become one of the more profitable car GM makes? If such, may be they will be more willing to sell more!

Not exactly, it just suggest how much GM was loosing with the Gen 1. The Gen 2 could be profitable by $1, then GM was loosing $9,999 with each Gen 1.

“You are going to lose that dog if you don’t tighten that loose collar.”

Sorry, I am this way about their/there/they’re, as well.

Good point, Goaterguy.

I suspect it’s incorrect to say GM will save $10,000 on every car over “today’s” Volt. It’s more likely that the $10k reduction refers to GM’s -original- cost, when Volt production started. The cost of their battery has gone down significantly since then.

So, don’t expect to see a price reduction of $10k. If GM goes from losing money on every car, to making money, then at least part of that $10k per car will go to their profit margin.

Looking at the Gen-1 Volt, I can easily see a few thousand dollars worth of cost reductions. I’m not sure about $10,000 though.

Still, I wonder how much of that is simply a reduction in the cost of the batteries, which have been falling in price since the original Volt came to market?

I think a good chunk of that $10k reduction is indeed the batteries. Supposedly, battery prices have fallen by 50% since the first Volt rolled off the line. Battery replacement warranty costs have also been much lower than what GM initially predicted, which one would think would allow them to reduce the MSRP further, as projected warranty costs are probably baked into the sticker price.

+1

Back in 2010, Dr. Patil (LG Chem) said that the entire pack cost around $10,000 to manufacture, or around $625 per installed/managed kWh. It sounds like the current Volt packs cost around half that to build. So there is $5,000 off the original cost. I think they were losing a little money on each Volt built in early 2011 at $40,200 MSRP. It sounds like they are making a little, but not much, on a base Volt now at an MSRP of $34k.
The problem I have with this article is that Eric is saying “General Motors reduced the cost of the next-generation 2016 Volt by some $10,000 per vehicle, as compared to today’s Volt” but Reuss didn’t say in the quoted part that the $10k reduction was from todays Volt. I hope Eric heard that clarification in an unquoted part of the talk or that I missed the quote.
Time to schlep over to GM Authority to see if it is there.

maybe since they will be more profitable, they may actually market the Volt!

That’s what I’m hoping! I’d love to see 100,000 per year being sold.

You read my mind. At what point do they make the point that on a Total Cost of Ownership basis (monthly) this is a *cheaper* car to any buyer.

The Prius holds that mark right now, mostly because resale values are so strong. GM has to be hoping to knock them off the TCO podium.

This is a really good-looking car compared to the slightly stodgy looking Gen 1.

I wonder if the battery is still limited to only 50% of its capacity? IMHO Chevy should offer the customers the option to increase pure electric range by unlocking e.g. 80% with reduced battery warranty instead.

It was never lower than 65% DOD, then it crept up 1 or 2 as it went from 16kwh, to 17.1kwh (2015). Volt 2 adds only ~1.3kwh (18.4), but again tweaks DOD up to 75%. -No links, from memory of “blitz week”.

Unpublished improvements, beyond the 3 mile AER gain, and 16 to 16.5kwh for 2013, basically take the 2015’s ~41 AER up by about 9 miles. Call that on an extra 1.3kwh, and (.75-.68)*17.1=1.2kwh.

Getting 9 more miles, on 2.5 more kwh, passes the smell test.

I have a 2014 Volt
I’d be happy to pay a reasonable amount to unlock the extra battery capacity to get the 17.1 Kwh available in the 2015. However I wouldn’t want to do it if it reduced the battery warranty. Since 17.1 is standard in the 2015 I’d think it shouldn’t change the warranty. Is the unlock a matter of a software or firmware upgrade or is there a physical different in the construction of the batteries for 2015?

It’s the latter, but some late-built 2014 have the 2015 pack.

Volt 1.0 was based on the Chevy Cruze. Is Volt 2.0 also a modified ICE design?

Volt 2.0 shares the same D2Rxx platform at GM that build the new Cruze and Chevy Equinox Crossover/SUV (biggest news IMO).

That might pave the way for the $10K cost reduction AND a potential Plugin Equinox.

Thanks for info, and yes, a Voltec Equinox would be wonderful

I don’t think I’d be as interested in a reduced warranty(excess 80%) battery. Long term health and longevity of the battery is most important to me. And with the added AER of 50 miles, I think that many people would agree with me. Mnd you, I’d love the additional range over the 50, but not at the expense of risking reduced life time of the battery.

Lou

If an automaker was to offer variable amounts of battery DOD it wouldn’t make sense to have it as a one time setting like choose 60% or 80%. Rather it would default to the lower one for battery health and at any point you could override that for a larger charge as needed. Accordingly, using more of the battery capacity wouldn’t have much of a negative effect on battery longevity since it would likely just be occasionally done.

This is actually what Tesla is doing with more recent iterations of the Model S. By default it charges to 80%, but you can override that and charge to 100% if desired.

That’s been the way the model S works for quite some time, at least 1.5 years.

Tesla updated all Model Ss to have the “slider bar” in which you can choose your standard charge level from 50% to 90%. I think it defaults to 90% though.

Then you can also select to “range charge” which tops up to 100%.

It is a well thought out feature, but I am not sure how many people would use it on batteries in the <24 kWh class.

The Nissan LEAF had an option to charge to 80%. But for strange reason, the EPA rated range as an average of an 80% charge and 100% charge. Nissan wanted to maximize the EPA rating so they dropped the option to charge to 80% in the 2015 LEAF.

I hated the 2011 LEAF implementation of this though, as you had to set a charge timer and say 80%. It was no help when quick charging (which was the time I wanted to use 80% the most).

Also, a few times I forgot to disable the charge timer at airport charing before running the the shuttle bus, the car didn’t start charging and my authorization would expire. So I return from a week long trip, without enough charge to make it home, and stuck with 3.3 kW charging…very annoying.

85kwh Model S, from 0 rated miles, to full ‘Range Charge’ requires ~77kwh, from the wall. When talking about Depth of Discharge (DOD), I believe it is the “window”, or max to min, any given battery allows its owner to tap. I think a lot of Tesla owners regard a range charge as “100%”, which is technically incorrect. When you put 77kwh back in, you loose maybe 4kwh at the wall, which puts DOD at more like 73/85, or 86%. I think the max range charge spec is actually 90%. It is below this ceiling where drawing 73+kwh takes the car down to a reserve, of about 5%. Maybe one of our battery experts can confirm the window (or DOD), and where it starts and ends (Tony?). There is a difference between maximum charge %, and DOD%. The Volt never lets you drain it. My 16.5kwh Volt soaks ~11.5kwh from the wall, typically replacing about 10.8kwh. Question being where the 10.8/16.5 (65%) DOD begins, and ends. Given that 5-17kwh PHEVs (Ford/VW/GM) are much more likely to chew through their entire DOD, daily, (and that they have engines) these cars wisely don’t push the 85%-90% DOD marks. Doing so would require… Read more »

…I should say the whole idea being that, whether Tesla, or 4 cell lithium RC cars, what you want to limit is maximum charges, and storing them “full”.

I remember prior to Gen 1 being sold Lutz said something to the effect that they baked 1 replacement battery into the price of the car. A lesson learned from their hybrid batteries I believe. I wonder if that played a part in the savings.

If you remember, GM fired the first shot at the Nissan LEAF battery design by offering the (now industry standard) 8 year 100k mile warranty on the battery.

Nissan quickly upped their battery warranty from IIRC 5 year 60k miles to match GM. It seems Nissan is going to take a big hit on that warranty. GM on the other hand seemed to underestimate their battery engineering team.

I haven’t heard of anyone using the 8yr 100k mile battery warranty on a LEAF.

Nissan provides a capacity warranty that GM doesn’t (and doesn’t seem to need). Nissan’s capacity warranty requires severe degradation, down to 60% of original capacity before the warranty kicks in. And then only says the replacement will have more than 60% of original capacity.

Basically the warranty criteria is so hard to meet that Nissan has not had to replace many battery packs.

The 2015 battery is supposed to be a significantly better chemistry that is heat resistant.

Check mynissanleaf.com. Plenty of people have used the battery capacity warranty.

The pack on my leased 2011 LEAF was definitely below 60% (5 missing bars). I didn’t bother going through the replacement, since I was close to the end of the lease. I was one of the worst case scenarios though, hot climate, long commute, and using DCQC.

Degradation/cycles is what GM was concerned with, hence the 65% DOD. The issue for Nissan will be that the capacity warranty is for 8 years 100k miles now, instead of 5 years 60k. Nissan has roughly 50k LEAFs with that first Gen battery out there. Lets say 10% have an issue and it is a $5k repair, that is a $25 million warranty hit.

“Nissan provides a capacity warranty that GM doesn’t (and doesn’t seem to need). ”

Wrong. GM was the first company to offer Capacity warranty on the battery pack before Nissan and before Tesla.

My understanding is that Nissan does not warranty the battery capacity, only the power output. I don’t know about the other EV makers.

Certainly power output and charge capacity are directly related; as the battery pack ages, it loses both. But those two characteristics are measured differently.

This is right off of Nissan’s website:

Lithium-ion Battery Gradual Capacity Loss:
In addition to the Lithium-ion Battery Coverage for defects in materials or workmanship (96 months/100,000 miles), the Nissan LEAF® Lithium-ion battery is also warranted against capacity loss below nine bars of capacity as shown on the vehicle’s battery capacity level gauge for a period of 60 months or 60,000 miles, whichever comes first. See your Owner’s Manual for tips on maximizing battery life and capacity.

So I guess I was wrong on the 8 years of capacity hurting their warranty costs.

LEAF started to offer battery warranty near the end of 2012 after a threat of class action lawsuits from 2011 adn 2012 LEAF owners in the warmer climate.

All EV makers provides the standard 8yr/100K miles (or unlimited mileage) battery “defect” warranty. But only GM and Nissan explicitly provides a capacity warranty.

GM’s capacity warranty is longer in terms than Nissan. But one can argue that GM’s warranty is already “derated” since it only uses a much smaller % of the battery. So, in order for anyone to call GM on that warranty, the battery would have to lose over 50% of its total capacity before it would register since Volt’s battery capacity is already derated.

What’s more, since the depth of discharge is much shallower than BEVs, and the battery has a liquid thermal management system, it’s incredibly unlikely that the Volt’s battery would ever lose that kind of capacity UNLESS there was a real defect.

GM has consistently stated that the Volt’s battery should last “the life of the car” (which I believe is 15 years in car speak?), and given the level of overengineering in the rest of the car, I believe them.

I suspect the reduction is compared to the 2011 cost. I wouldn’t be surprised if they knocked a few $k out of the battery by 2015.

Now, GM has reasons to push the sales/volume of the car.

Even if GM were to only break even on the cost of the car (after cash on the hood, financing incentives, etc.) its still a massive improvement considering what they’ve added to the car (15 miles of range and better gas MPG over my 2012 Volt).

I’m still stuck with my Volt (thanks to its steep depreciation), but a few fence sitters I know might actually pay some attention when they go to replace their car.

Let the price war begin.

I predict a big price cut for Nissan Leaf this year.

Ford Focus electric should be upgraded to use DC Combo fast charge, and the trunk space be improved since LG batteries are now more energy dense making the battery pack smaller.

Besides just savings in the battery, another big way that car companies often save money on production is to standardize on parts used in other vehicles.

A prime example of this was when Ford bought Volvo and greatly cut the cost of building a Volvo by switching to the same Ford starters, alternators, axles, etc that they put in Ford cars. GM did the same thing with SAAB.

If GM was able to swap out more parts that originally were just for the Volt, for off-the-shelf parts that they use in other cars, that would go a long way to cutting costs. Same thing if they went the other way, and started using parts in other lines of cars that were originally developed for the Volt. That would greatly reduce costs too.

Parts are priced by guaranteed volume and guaranteed delivery. The higher volume, and the tighter the contracted delivery dates are, the lower the price. Much lower in many cases.

On v2.0 they saved money on the designer. 🙂
Australian Holden designers could have done way better dig dig..

agree with better engineering you can take costs out and increase performance if done well. Fingers crossed for them.