Wanna Get Away

You could finance your dream vacation with the purchase of a Chevy Volt. Thank you Mr. President!

  by: Mark Modica ( July 12, 2012)

General Motors has announced a 60 day money back guarantee policy for all new Chevy models, including the Chevy Volt. The move sets up a scenario where purchasers can buy a Volt, claim the $7,500 federal tax credit (and most likely state credits) and return the vehicle for a refund within 60 days. Did GM really not consider this glitch, or is this just

Every Volt now comes with it’s own Fireworks Display

another way for Government Motors to prop up politically important Volt sales leading up to November elections?

IRS tax form 8936, for plug-in motor vehicle credit, does not have any minimum time requirement for buyers to own their qualified vehicles. The vehicle only has to be new and purchased during the tax year being claimed. Buyers of Volts will have documentation and VIN numbers for qualifying vehicles. The 60 day return policy lays the groundwork for a very easy way to scam the IRS out of $7,500. Buyers will most likely have to eat registration fees and sales tax paid that will be deducted from refund. So, in an effort to save taxpayers millions of dollars on the potential scam and save GM and its shareholders from losing more millions of dollars on the Volt, I suggest the Volt be exempted from the return program.

Of course, there is the possibility that Government Motors is aware of the situation. Volt sales may pick up, if enough people hear of this. Millions of dollars in tax credits will be claimed and GM can tout improved sales. GM will then have returned Volts to sell that will no longer qualify for the tax credits; the vehicles will be sold as used for thousands of dollars less. GM will have to reimburse dealerships for some portion of the losses. And unless the IRS has a database of VIN numbers for qualified vehicles, buyers of used Volts with low mileage may be tempted to claim the tax credit again, upping the federal subsidy to $15,000 per vehicle. Hopefully the IRS has safeguards to prevent double claiming of EV credits. In the past, the IRS did not seem too concerned as there was not even a field on prior year forms for VIN numbers, something that changed after my criticism of GM dealerships taking tax credits.

So, for the sake of taxpayers, let’s hope that GM tries to rely on GE to purchase a bunch of Volts to prop up sales instead of costing taxpayers lost revenue on an easy scam by purchasers of Volts.

The Volt needs a Jolt

Reuters: GM Is Losing Nearly $50K on Each Electric Volt

by:  at the Blaze

General Motors posts a $49,000 loss for each new Volt plug-in hybrid it produces, Reuters reports.

You know what this means, right? It means that for each new Chevy Volt, the taxpayer bailed out company loses what the average American makes in a year.

And on top of that, rock bottom lease offers made during the summer may have inflated the above number. According to the report, some motorists paid only $5K to drive around in a new $80K Volt for two years. Oh, yeah, and Volt production has been put on hold at GM’s Detroit-Hamtramck plant.

What we’re trying to say is that it will be a very, very long time (if ever) before GM makes a profit on the Volt.

The problem with the car is that “the Volt is over-engineered and over-priced,” according to Dennis Virag, president of the Michigan-based Automotive Consulting Group.

But hey! If it’s any consolation to GM, Nissan, Honda and Mitsubishi are all having a hard time marketing their electric and hybrid models as well. But even that minor bit of consolation disappears when you consider the fact that Toyota has had great success with its Prius model (meaning it’s possible to have a successful electric-hybrid).

“GM’s quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs — which will be difficult to bring down until sales increase,” the Reuters report reads.

“But the Volt’s steep $39,995 base price and its complex technology — the car uses expensive lithium-polymer batteries, sophisticated electronics and an electric motor combined with a gasoline engine — have kept many prospective buyers away from Chevy showrooms,” the report adds.

But more than just steep prices, many Americans simply prefer a car that gets better mileage and has the infrastructure in place to help charge and maintain it.

“It’s true, we’re not making money yet” on the Volt, Doug Parks, GM’s vice president of global product programs and the former Volt development chief, told Reuters in an interview. The Volt “eventually will make money. As the volume comes up and we get into the Gen 2 car, we’re going to turn (the losses) around,” he added.

But some analysts disagree with Parks.

“I don’t see how General Motors will ever get its money back on that vehicle,” said Sandy Munro, president of Michigan-based Munro & Associates, which specializes in vehicular analysis.

It currently costs GM “at least” $74K to produce the Volt, including development costs, Munro added.

“That’s nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama’s green energy policy,” Reuters notes.

Again, as stated earlier in this article, with these type of costs tied into the vehicle’s production, it may be a very, very long time (if ever) before GM sees a profit on the Volt.