According to multiple GM executives there is little or no profit being made on each Volt built at a present cost of around $40,000. Furthermore, the $700 million of development that went into the car has to be recouped.
GM says they have a long-term plan to make the Volt profitable. Given GM’s recent history, one has to guess that the plan is to receive a bailout. This isn’t snark: My guess is GM’s plan for the Volt is to profit from government incentives.
I’m not just talking about subsidies, which I’m sure that President Obama would dearly like to institute, but CAFE standards. With CAFE standards due to increase to an insane 54.5 mpg, every Volt sold at a loss will give GM more breathing room for regular cars.