The Chevy Volt was a money vacuum, so how did it get the green light?
As far as coming of age car stories, the Chevrolet Volt may as well have been dealt the worst hand possible. At the time of the Volt’s release, GM was trying to climb out of the dumps. How did they get there? By making gas guzzling SUVs and cars with questionable quality at a time when the economy stunk and fuel prices were skyrocketing. Prior to the crash, GM had been making serious cash on highly profitable SUVs and trucks while reluctantly making small fuel-efficient cars to appease government regulators.
This reluctance showed because GM’s small cars were starved for serious investment dollars and that lack of investment reflected both in the showroom and on the street. When the housing crash of 2008 happened, GM was already in bad shape due to banking on SUVs that laughed at mpgs and small cars that nobody wanted. Consumer dollars played the hand of natural selection and killed GM, so the government stepped in to turn things around. This is how the Chevrolet Volt was born, or so conspirators say. The Volt was crafted as a symbol for changing tides at GM and as a beacon for the direction in which the government wanted the American auto industry to go.
Unfortunately, while the Volt stacked up awards for leading the charge towards emissions-free vehicles, it was an impractical car for consumers and the damaged company that made it. Its range of 25-50 miles in electric-only mode was just enough to get around for daily errands while the range-extending motor only seemed like a stopgap during high-mileage trips (max range 380 miles) and a paperweight in all other situations. Everything else about the car was bad too. Not only was the Volt ugly, but it wasn’t as roomy or reliable as the Toyota Prius. Granted the Prius had already been in the game for 10 years and had improved itself through three different iterations. Unfortunately GM had to tangle with the industry's green standard.
What's worse is that you could buy a 2011 Toyota Prius for $1,000 less than a 2011 Chevy Volt, even after a $7,500 federal incentive! For all of that effort, you’d think that this electric car would have some major returns for a revived GM. So it was surprising to learn that in 2012, Reuters reported that GM was losing up to $49,000 on each Volt that was sold. Bob Lutz, the CEO of General Motors from 2001 to 2010, reported that this number was wrong and said it was closer to break-even. (It ended up being unprofitable.) For this massive waste of money, the returns were so bad that one only wonders where all the money went. Especially after cars like the Tesla Model S came out only a year later and blew the Volt's tech and profits out of the water.
Luckily, GM has wised up in past years and the newest generation of Volt will finally put it back in the black with regard to the model's profitability. There's also the new Chevrolet Bolt EV which seems to show GM learned from its mistakes the first time around.