Chevy Volt leapfrogs Toyota's Prius

Nov 30, 2010 Full story: taintedgreen.com 9,256

Toyota has fallen to GM on the MPG front. The Japanese company continues to lose market.

Full Story
Proteus

Windsor, Canada

#2265 Jan 16, 2013
The Reuters article wasn't necessarily "wrong".
In actual fact, it merely expressed the Volt's cost vs profitability picture in another way.

GM chooses to accrue costs vs profitablity over the life span of a new product.
Their accounting method makes the balance sheet generally look better than if they used a "break even analysis" approach, which is somewhat like what the Reuters article spoke to.
Nothing wrong with GM's accounting model, just as there's nothing wrong with the model Reuters used.
They each paint a different picture, that's all.

FYI, Accountants will often ask the question "What do you want to see?" to a business, and letting the business choose how its accounting model is structured on the basis of which structure suits its best interests.

“Most Honored Senior Member ”

Since: Jun 09

Dallas, TX.

#2266 Jan 16, 2013
Well, not really. Reuters calculated a number calculating ďloss per carĒ based on fictitious accounting methods. Every automaker figures profit in the same manner. This is standard accounting in automobile manufacturing, itís nothing new.

Or to put it another way, using Reuterís non-logic, Ford sold the first dozen C-MAX (Voltís competition) at a 500 million development cost, using Reuterís accounting, Ford is losing 41 million for every car they sell.
It just doest work like that.
Proteus

Windsor, Canada

#2267 Jan 16, 2013
JJFADS wrote:
Well, not really. Reuters calculated a number calculating ďloss per carĒ based on fictitious accounting methods. Every automaker figures profit in the same manner. This is standard accounting in automobile manufacturing, itís nothing new.
Or to put it another way, using Reuterís non-logic, Ford sold the first dozen C-MAX (Voltís competition) at a 500 million development cost, using Reuterís accounting, Ford is losing 41 million for every car they sell.
It just doest work like that.
Like I said, by using a different accounting model, the picture can change dramatically.
I cannot speak to your claim that Reuters used fictitious numbers, but if the numbers they used were anywhere near reality, using their model would show that GM had a loooong way to go before breaking even on the Volt.
I'm old school.
I prefer to look at costs versus profits in real time, not in creative accounting time.
And not all automakers use the same accounting model.
European automakers, particularly Brits, use a completely different system.
Similarly, Asians, especially Japan also do things differently.
And that, my friend, is the truth.

“Most Honored Senior Member ”

Since: Jun 09

Dallas, TX.

#2268 Jan 17, 2013
Profit per vehicle is figured the same way at all car companies.
Proteus

Windsor, Canada

#2269 Jan 17, 2013
JJFADS wrote:
Profit per vehicle is figured the same way at all car companies.
Given that the chances of you ever admitting being wrong are slim to none, it's time to drop what is essentially a pointless discussion.
However, you might want to check out a few non North America car companies to learn how they determine profit per vehicle while waiting for another opportunity to impress everyone with your vast knowledge of the car business.
G'day.

“Most Honored Senior Member ”

Since: Jun 09

Dallas, TX.

#2270 Jan 17, 2013
Cop out
Proteus

Windsor, Canada

#2271 Jan 17, 2013
More like a turn off.
I don't suffer arrogant know-it-alls very well.
Pete

Sparta, MI

#2272 Jan 19, 2013
Toyota Prius is still the worlds best selling electric.

Too Funny.
Pete

Sparta, MI

#2273 Jan 19, 2013
Pete wrote:
Toyota Prius is still the worlds best selling electric.

Too Funny.
Wifey says:
That's very true...

and BM's volt is still the worst seller...

as it's existence is only because obama gives it Tax Payer steroids.

Too Funny.
Root

Shreveport, LA

#2274 Jan 20, 2013
I'm so glad the Volt is the worlds best selling electric hybrid.
car nut

Naperville, IL

#2275 Jan 20, 2013
Root wrote:
I'm so glad the Volt is the worlds best selling electric hybrid.
UUUMMM,The prius out sells the volt hands down pal.

“People say I look like him! ”

Since: Jan 13

Location hidden

#2276 Jan 20, 2013
I think they're both great cars, but the proof is in the pudding. The track record and the number of sales is yet to be seen for the Volt.
Root

Shreveport, LA

#2277 Jan 21, 2013
Volt is the number one seller in its class. The Prius is not. I'm glad to see Volt is #1.
Volts for Dolts

Trumbull, CT

#2278 Jan 21, 2013
Root wrote:
Volt is the number one seller in its class. The Prius is not. I'm glad to see Volt is #1.
The Volt is the only car in it's class.
car buff

Naperville, IL

#2279 Jan 21, 2013
Volts for Dolts wrote:
<quoted text>
The Volt is the only car in it's class.
The tesla is the top of its class as a full electric car.The volt is a semi electric semi gas guzzler in its class.
iluvmyVolt

Santa Clara, CA

#2280 Jan 21, 2013
car nut wrote:
<quoted text> UUUMMM,The prius out sells the volt hands down pal.
Hi guy. You're over here too? Sheeeeesh. No, the man is right. It is the best selling electric hybrid out there. It outsells the plug in prius by a long shot. You are thinking parallel hybrid again. Shame, shame.
iluvmyVolt

Santa Clara, CA

#2281 Jan 21, 2013
Proteus wrote:
A sinmplified explanation of what I'm trying to say:
There were huge costs involved in development of the Volt--R&D, Testing, Tooling, Plant Modifications, Marketing, etc.
Esimates range from $1 billion to $1.5 billion.
GM has in fact published development estimates well within those ranges.
There are also costs to GM to produce the Volt, parts, labor, production expenses, etc.
Estimates range from $22K to $30K for each unit depending on who one talks to.
Somewhere along the way, those costs have to be carried and amortized (accrued)by the manufacturer.
Depending on the accounting models used, there are a variety of ways those costs can be be accrued.
More commonly, R&D costs can be applied against earnings and become a deductable expense---this reduces (but does not eliminate) the tax burden on the company.
Tooling and plant equipment costs are usually depreciated over time--most commonly over 10 years.
Depreciation on plant and equipment is a cash flow and goes directly to the bottom line.
Parts, labor and overhead are direct production expenses and are offset by profits--where profits exist.
Needless to say,costs not covered by things like depreciation and R&D rebates must be offset by profits.
Now in a huge company like GM--profits can flow from all operations, thus a low profit product can be helped by higher profit products, and the company remains profitable overall.
But companies like GM look at profits in more than one way.
The big (public) picture looks at all profits, and these are usually expressed in corporate annual reports.
However, from an internal viewpoint (non public), companies like GM examine internal business units and evaluate each internally on an individual basis.
Looking at the Volt as a standalone business unit, after all accounting practices have been applied, there are still very large costs that must be accounted for, and applied to that business unit's uultimate profitability.
Depending on two factors, sales volumes and time, costs which remain unaccounted for by tax benefits or depreciation allowanaces, may or may not be fully amortized for some time.
In the Volt's case, an internal evaluation of that business unit would undoubtedly show there are still a number of years to go before costs are fully amortized.
What could mitigate this amortization period are two things--(1) If future sales volumes increase; and (2) Volt technology can be applied to other models in the GM EV lineup.
Don't you listen? The man is absolutely correct. You can't tally R&D costs until the end of the run.

Reuters started this whole debate and even they don't agree with you. Their number for R&D costs ($1 billion) divided by the 21,000 units that were sold at that time equates to the $47,000 "losing" number they reported.

Haters grabbed onto that number and froze it per unit. In other words, every Volt will lose $47,000 forever. IMPOSSIBLE, my friend.

The Toyota Prius took 5 years to cover R&D. AT current rate of sales, the Volt will cover R&D at 3 years.

All that other smoke screen you throw up there is just that. Smoke screen.
Give Me Facts

Santa Clara, CA

#2282 Jan 21, 2013
Volts for Dolts wrote:
<quoted text>
The Volt is the only car in it's class.
Wrong. BMW 1 Series (series hybrid). Fisker Karma (series hybrid). Via Motors (series hybrid). Jaguar XJ (series hybrid). Ford Escord (series hybrid). Ford C-Max (series hybrid). Several others. I believe you think the Volt is the only car in it's class because it is the first in it's class.

Many more to come. VW, Porsche & Audi are to build series hybrids soon.

It is the future.
Root

Shreveport, LA

#2283 Jan 21, 2013
Im glad to see Volt doing so well.
liner

Delray Beach, FL

#2285 Jan 22, 2013
Root wrote:
Volt is the number one seller in its class. The Prius is not. I'm glad to see Volt is #1.
If you're going to compare the Volt to the Prius, you need to realize you must limit your remarks to the Prius Plug-In model. The "regular" Prius has been on the market for many years and far outsells the Volt, but it is not comparable.

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