Volt zaps Holden profits

GM Holden says its first electrified vehicle, the ground-breaking Volt plug-in hybrid, is designed foremost as an exercise in promoting GM’s advancement of technology – not to make money.

In fact, GM has long admitted the high-tech Volt will not be profitable in its first generation, and well-placed motoring.com.au sources have now revealed Holden will lose $10,000 on every Volt it sells.

Speaking at the Australian launch of the Volt in Sydney today, one senior Holden executive told motoring.com.au the brand’s “technology flagship” is being used to get “bums in seats” and give the consumer a taste of just what GM is capable of, at the expense of outright profit.

The frank admission means consumers are actually getting something of a bargain with the model’s pricetag of $59,990 plus on-road costs. Our source said Holden could have spent hundreds of thousands of dollars advertising the Volt and sold it at an even higher price, but preferred the idea of getting the car to do the talking.

“Once customers get a feel for how good the Volt is, word of mouth will spread and the car will sell itself. That’s worth a lot more to us than advertising. You’ve only got to look at forums and how competitive owners are becoming with their economy figures,” he said.

In Australia, plug-in hybrid or electric vehicles do not receive any form of government subsidy, primarily because none of them are built locally and the nation remains heavily dependent on non-renewable power sources including brown coal, making electrified vehicle incentives politically unpalatable.

This is despite lobbying from EV makers including Mitsubishi, which launched Australia’s first EV in the pint-size i-MiEV priced from $48,800, Nissan (which launched the larger LEAF hatchback last month from $51,500) and luxury brands like BMW and Audi, which will introduce their first hybrid models here late this year.

Though Holden has the technical ability to produce the Volt in Adelaide alongside the Cruze, with which it shares its GM Delta II small-car platform, it says that having a “global centre of excellence” to produce such high-tech cars makes more sense than “tooling up” to build a handful of models for local consumption or regional export.

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