DETROIT — General Motors Co. sold a record number of Chevrolet Volt sedans in August — but that isn't necessarily a good thing for its bottom line.
Nearly two years after the introduction of the plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. GM on Monday issued a statement disputing the estimates.
Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. Some Americans are paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.
And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford Motor Co., Honda Motor Co., and others.
GM's basic problem is that "the Volt is overengineered and overpriced," said Dennis Virag, president of the Automotive Consulting Group.
And in a sign that there may be a wider market problem, Nissan Motor Co. Ltd., Honda, and Mitsubishi Motors Corp. have been struggling to sell their electric and hybrid vehicles, though Toyota Motor Corp.'s Prius models have been in increasing demand.
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.
But the Volt's $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 showrooms.
Some are put off by the technical challenges of ownership,mainly related to charging the battery. Plug-in hybrids such as the Volt still take hours to fully charge the batteries — a process that can be speeded up a bit with the installation of a $2,000 commercial-grade charger in the garage.
The lack of interest in the car has prevented GM from coming close to its early sales projections. Discounted leases as low as $199 a month helped propel Volt sales in August to 2,831, pushing year-to-date sales to 13,500, well below the 40,000 cars that GM had hoped to sell in 2012.
The weak sales are forcing GM to idle the Detroit-Hamtramck assembly plant that makes the Chevrolet Volt for four weeks starting Monday, according to plant suppliers and union sources. It is the second time GM has had to call a Volt production halt this year.
GM acknowledges the Volt continues to lose money and suggests it might not reach break even until the next-generation model is launched in about three years.
"It's true, we're not making money yet" on the Volt, said Doug Parks, GM's vice president of global product programs and the former Volt development chief. The car "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," Mr. Parks said.
"I don't see how General Motors will ever get its money back on that vehicle," countered Sandy Munro, president of Munro & Associates, which performs detailed tear-down analyses of vehicles and components for global manufacturers and the U.S. government.
GM said it allocates development costs across the lifetime volume of the program. Reuters calculated the per-vehicle development costs based on the number of Volts sold through the end of August.