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After Selling 1 Hummer Ev in Q4 2021, GM is planning to increase production. What exactly does that mean? Going to 2 for Q1?

In all seriousness a few tidbits from the article,

  • 95% of reservations are converting to orders
  • Even at low production Hummer is profitable (thats a lie, gm cooking books)

They probably aren't cooking the books. They probably are spread the cost of the Hummer production to the Silverado and the Lyriq. I assume the front motor on the Hummer is the same they are using on the front and back of the Silverado and the rear of the Lyriq. A lot of the 4 wheel steering hardware and software for the Hummer will be used by the Silverado and I assume Sierra EV as well.

When people talk about development cost and how you allocate it to each vehicle you have to understand how they (GM) allocated the development cost.
 

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The Hummer producing 30 a month is not making money, just labor and the factory recurring costs are higher than the gross revenue 30 Hummers generates. That's before we get to parts, and development cost is a whole different issue. Right now at a 30 hummer per month rate Hummer are costing more than $1M ea to build, just factoring hard cost. 450 employees wages, utilities on the plant, remember batteries are being hand built which likely cost over $100K ea. Hummer might break even at 1000 a month, if Silverado and Sierra are paying their fair share of the factory recurring cost to lift that burden off the Hummer, but right now Hummer is carrying the torch, and it's heavy. Remember also GM's revenue off each Hummer sale is about $20K less than the price by the time they pay the dealer commission, shipping (3 per semi) , sending engineers to prep each for delivery. Hummer is likely losing right now $20M or so a month. Heck the power bill at that plant is likely 50-100K per day...
You hurt my head. It's like you didn't read anything I wrote. Yours trying to attribute all the cost of factory zero to the Hummer. I guarantee that isn't what GM did from a costing standpoint. They didn't put in almost a billion dollar paint shop to paint white Hummers.

I'm done. Good luck with your future monologues.
 

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You do not seem to understand business accounting... So when GM is going through development of a vehicle that cost goes to R & D, And the plant building cost goes to CapEX, once you announce production has started, the cost of the plant operation shifts from CapEX to Cost of Goods Sold. GM announced Hummer Production started 30 Sep 2021, so that means since then all the cost is accounted as cost of goods sold related to the Hummer, and Hummer systems. Now, some of the plant cost in the areas still under development for Silverado or other vehicles can still be applied to CapEX, but not the Hummer production areas by GAAP rules. That means every time they fire up the paint shop to run a batch of Hummers (likely once a week) all that operating cost is accounted as cost of goods sold, and applied to the revenue from those vehicles, and every time that paint shop fires up Cha Ching... that is a lot of natural gas, and electricity.
I understand business accounting very well and I can guarantee there is no balance sheet entru that says Hummer (2,000,000,000).

How they internally allocate cost/vehicle and the actual credits and debits on a balance sheet are very different.
 
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