GM to Cut Volt’s Production Cost by $10,000 image

GM plans to cut $10,000 from the Chevrolet Volt production costs to make the next plug-in hybrid generation profitable and affordable.

“That’s our goal,” CEO Dan Akerson said yesterday in an interview after a presentation at the Fortune Brainstorm Green forum in Dana Point, California. “Every new technology takes a while to get traction, you’ve got to work out all of the associated issues.”

The base price for the Volt, which hit the market in 2010, is $39,145 before a $7,500 U.S. tax credit. The model is part of GM’s plan to have 500,000 vehicles with some form of electrification on the US roads by 2017. Akerson said he wants to cut the Volt’s production cost by $7,000 to $10,000 for each vehicle. Until now the model failed to reach its target although sales in the US in March increased 8.4% to 4,244 units reaching 23,461 units, half of Akerson’s goal of 45,000 units.

“We know we have to reduce costs,” Akerson said during the interview. “We’ve got to look at smart ways at getting it better positioned from a price perspective and that means we’ve got to take cost out of it.”

Source: Bloomberg