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Chevy Bolt EV: GM stands to lose $9,000 on each car sold before credits

Chevy’s foray into the EV segment has not proven to be the easiest way to make a profit. Chevy stands to lose $9,000 on each Bolt EV before government credits kick in, according to Detroit News. That might sound like it stings, but Chevy actually benefits.

There are a few reasons that factor into why Chevy stands to lose so much money before credits. The most notable is that Chevy isn’t controlling the entire manufacturing process as it does for its other vehicles. It’s relying heavily on LG for parts such as the battery, Detroit News explained. That part alone is costing the company $145 per kWh. That means that Chevy is paying LG at least $8,700 per battery, and even more for the larger options.

LG is also making other components, raising the price of the car before Chevy even begins building it. This isn’t the first time Chevy has found itself in such a predicament. It struggled to earn a profit on the original Volt but eventually turned that car into a profitable venture.

Still, that’s a big sum to lose and may be a reason why Chevy is cutting down initial availability of the Bolt EV at launch. The Bolt EV will go head to head with the Model 3 when Tesla’s car eventually hits the market in the coming years.

All is not lost…

Chevy is making up for its loss with the electric vehicle credits. For example, California ZEV credits range from $4,000 to $5,000, of which Chevy is receiving four for the Bolt EV. After the credits, Chevy ends up making a profit of nearly $10,000 for each car—so it’s not all bad. GM won’t be going out of business anytime soon.

Article source: http://www.technobuffalo.com/2016/11/30/chevy-bolt-ev-gm-lose-9000-dollars-on-each-car-sold/