Electric Car Imbroglio Is About To Get Even More Expensive…
In just a few
months from now, it will be $2,500 easier to buy a new
electric car. I put buy in quotes because in fact, other
people will be paying a good chunk of the purchase price
to the tune of a $10k direct cash payment (it is euphemistically
called a tax credit) per car, courtesy of The Man With
The Plan. (But without much understanding of economics or engineering.)
A line item
snugged deep within Barack Obamas 2013 federal budget
which hasnt passed yet and wont be passed until after
the (s)election this November will up the existing electric
lemon inducement from the current $7,500 per car to $10,000 per
car. This means the subsidy payout alone on something like
a new Chevy Volt will be almost as much as the total cost (without
any subsidy) of a decent little economy runabout such as
the 2012 Nissan Versa.
And the government
giveaway will be immediately available, too dangled in front
of buyers (cough) at the point of sale, making
it transferable to the dealer
allowing consumers (italics
mine) to benefit when they purchase a vehicle rather than when they
file their taxes.
they will be consuming . . . other peoples money. A
tremendous buttload of it. How much is a tremendous buttload, exactly?
Well, if you assume 10,000 electric lemons, thats $100 million
bucks. And Obamas stated goal is to
million (italics mine) advanced technology vehicles on the road
You do the
want to? Here, Ill do it for you: Itll come to about
$10 billion if Obamas goal of one million electric
lemons is realized. Thats just under 10 percent (in inflation
adjusted dollars) of what it cost to put Neil Armstrong on the Moon.
Back in 69, at least, the American people got something
for their money. After all, Apollo 11 did make it to the Moon
and back. Most electric cars cant make it to the store
even a $10,000 per car federal giveaway $10 billion thrown
into the wind might not be enough to do the trick.
car sure hasnt.
which has an MSRP sticker price of $39,145 costs GM about $89,000
to build. So GM is losing roughly $50,000 per car.
Thats a helluva way to do business. It might make more sense
just to build a fire with all that money. At least some heat
as opposed to hot air could be gotten out of it.
Even with the
existing $7,500 tax credit and sweetheart lease offers as low as
$199 per month designed to move product, not much product
has been moving. As of mid-September, year-to-date Volt sales
have yet to reach 14,000 just a bit shy of the projected
40,000 GM anticipated.
And how about
those Obama Jobs the Obama Car was supposed to confect? GM has had
to idle the production line where the Volt is (well, was) built
and temporarily lay-off 1,300 workers.
shocking is that GM apparently wasnt able to
anticipate any of this. It does not require the proverbial rocket
So, are the
guys in charge stupid? How else to explain their inability
to anticipate that a car that costs more than $33,000 thats
after the current $7,500 tax subsidy and which will
still cost $30,000 after the pending $10,000 subsidy or as
much as an entry-level Lexus or BMW might not be very appealing
to people concerned about paying $3 and change for a gallon of gas?
you know, are concerned about spending money unlike
GM and Obama.
may be just the point. Theyre not stupid. Its simply
that its not their money. Its yours. Always
more where that came from.
So, they dont
care that the Volt and the rest of them suck
ass, economically speaking. Functionally, too. Though interesting
as technology demonstrators, they still cant go nearly as
far without lots of hassle as the most humble non-electric
Perhaps a car
like the Volt will pay for itself down the road, in the form of
reduced operating costs (well, except for the cost of electricity
and that $2,000 charging station youll need to have installed
in your garage). But even assuming the Volt and its kind are cheaper
to drive, long term and thats by no means certain or
even probable they still cost Lexus-BMW money up front. Even
with the $7,500 subsidy. Even with the pending $10,000 subsidy.
And people in a position to buy a Lexus or BMW want
or a BMW. Not a Chevy.
And those who
arent in a position to afford a Lexus cant afford this
[send him mail] is an automotive
columnist and author of Automotive
Atrocities and Road Hogs (2011). Visit his
© 2012 Eric Peters
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