A couple of reasons...The EV1 program, as I understand it, is very similar to the current Project Driveway GM is doing right now (Fuel Cell Equinoxes). Those vehicles cost many millions a piece if you spread out development costs, like Number 3 said. However -- they were forever GM's property. Not a one was sold.
The crushing of the cars was a relatively smart choice given the cancellation of the program, because it protected their technology. It's the same reason they leased them. "owners" were obligated to take care of the car, and return it. It was more a test-fleet program than a production run. Toyota never got ahold of one, for example -- they couldn't reverse engineer them. And that's part of the reason the Volt will be able to step on them...
1000-2000 cars is not alot. It's a drop in the bucket, actually...since that's less than one car per dealer....crushing them really was a choice totally separate from the cost associated with the action. Most of that money was tied up in R&D...the crushing of cars didn't effect that.
And if they had spent
less money on the program...then the vehicles would have been even worse, and they would have proportionally lost the same amount of money on that cheaper program.
The core problem with the EV1 was the fact that it was unpopular in its time, impractical, and expensive.
