Chevy Bolt May Sell at a $9,000 Loss … But it’s Probably Worth It

The Bolt is Chevy’s current “big thing” for a few reasons: it’s the first inexpensive electric car capable of travelling more than 200 miles on a single charge; it’s the first effort from any domestic manufacturer that directly Challenges Tesla’s all-electric threat; it’s also going to be a huge loss leader for Chevy — they’ll probably lose $9,000 on each Bolt sold. But why?

In short: they’re looking forward. A huge part of any manufacturer’s game plan has to be emissions. Chevy’s most profitable vehicles are trucks, and as such, they’re also their biggest polluters. To offset that, they have to produce other vehicles with ever-lower emissions, like the Volt. Electric cars are the goal, but building a large one is a costly affair. The Bolt is the first step toward eliminating emissions completely from their passenger cars. Even Tesla started small with the Roadster before launching its blockbuster Model S. Chevy’s doing something similar here. Just, instead of building a sports car based on another older car, they’re building their small car of the future, now.

Even if they sell at a tremendous loss, the technology for the infrastructure that created the Bolt is well worth it. Building batteries and selling chargers is a big business. Just ask Samsung or LG. It’s also important to recognize that the at-home charging infrastructure will get a boost from the Bolt as well, making electric cars more viable to people who wouldn’t traditionally be able to use them. Your hyper-urban apartment complex might just shell out for fast-chargers if the Bolt and Model 3 become as popular as the Model S.

Of course, the cars are built to suit California’s stringent air-quality requirements — they’re electric, no emissions there — but in all likelihood those standards will spread to other areas with dense populations. That Chevy earns emissions credits selling cars like these so that they can keep their SUVs and trucks the way people like them is a big deal. So sure, they may stand to lose money on each Bolt sold, but in the long-term, it’s worth it for them. In the short term, it’s probably worth it for you as well.

via [Bloomberg]

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