GM's Biggest Mistake in 2005

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Toyota lost money on the Prius for quite a few years so that's what people tell us. But Toyota has much deeper pockets than GM. Last time I looked their market cap was like 20 times GM so they could afford to do that. This is a much bigger mistake than the EV1. The Prius gives it this enormous image boost. And everyone at GM is gnashing their teeth thinking that could have been us."

Jonathan Rauch, of the Brookings Institution and the Atlantic Monthly, talks with EconTalk host Russ Roberts about the evolution of the Chevy Volt, GM's planned electric car. Due to the transparency of GM's effort, Rauch was able to spend a great deal of time on site at GM writing a piece for the Atlantic Monthly on GM's plans and hopes. Rauch discusses the huge risks, GM's past failures, and GM's hopes that the Volt might change the company's culture. The conversation closes with a discussion of competitors and the implications for energy policy.