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  • Will Electric Cars Make It Without Bailouts?

    Perhaps buyers are waiting for President Obama’s proposed $10,000 tax credit for the Chevy Volt. Despite government bailout money and incentives, GM temporarily halted Volt production and laid off 1,300 Detroit employees as lackluster demand resulted in low sales. Unfortunately, this is becoming a routine ordeal that inspires a glut of political debate. This is not the way business should be.

    The Volt’s sales, employment, price tag, and safety features automatically have become the fodder of larger political debates—not because politicians in Washington especially care about the happiness of manufacturers and drivers, but because they are investors in the success of GM and the green agenda that it represents. This is especially true for the Obama Administration, which has tied jobs promises to green energy and has set an arbitrary goal of putting 1 million electric cars on the road by 2015. The result is that the federal government is a stakeholder in the car company. It has put billions of bailout dollars at risk, which will impact public confidence in the President and his policies.

    In contrast, notice the kind of attention Nissan is getting. The performance of Nissan’s Leaf, which (like the Volt) also qualifies for the currently $7,500 tax credit offered under the Bush Administration, is not much better. The company sold 9,674 of its version of the compact electric car last year, while Volt sold only 7,671. Both were far below expectations. However, the Leaf escapes much of the bad press and political scrutiny endured by the Volt, because Nissan never leaned on the federal government to prop it up.

    If the Volt and GM continue to hobble along, the government will once again look foolish and hold some responsibility. It’s time the Administration learned its lesson and stepped out of the market to let American companies and consumers be the judges of this new technology.

    Katie Tubb is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

    Posted in Energy [slideshow_deploy]

    14 Responses to Will Electric Cars Make It Without Bailouts?

    1. Stirling says:

      Answer: No. but as long as they keep trying it's a constant reminder to myself and others that our money is being wasted by GM (government motors). Until government stops picking winners and loosers they will continue to be blamed for the abuses they have caused the American Taxpayer.

    2. Jeff, Illinois says:

      If left only to the so-called free market . . this country will never produce the next generation vehicles and dependence on fossil fuels will continue to haunt us. This is a great opportunity for the government to help kickstart a new and needed industry. I only wish more money was budgeted for such forward efforts. On the flip . . if horse and buggies were more profitable, the GOP would be supporting it!

      • Stirling says:

        If left to the free market we wouldn't have wasted all the billions on green energy companies that are now "Out of Business." Fossil fuel has and is running our country, only 2% of our reserves have been tapped, that leaves 98% of whats availible in our country to tap if the enviromentalists would get out of the way and drop the economy cripling regulations.

        Obama’s Oil Numbers a Lie? http://video.foxbusiness.com/v/1477162300001/obam

        • Jeff, Illinois says:

          A Fox reference, I rest my case!

          • Stirling says:

            So this means any information (good or bad) that challenges your ideology belief you will totally disreguard? Even if it may be true… They call that being a "lemming" Jeff.. The reason for keeping an open mind on issues is to know both sides and let the facts determine the truth. Given the media spin and propaganda I would think you would want to make informed decisions rather then dismiss out of hand opposing viewpoints.

    3. jmc says:

      No, electric cars will not even make it *with* bailouts because they are just a pipe dream. Until we come up with some way to store massive amounts of electricity in a small, lightweight device, electric cars are not going to be viable. Chemical batteries are too big, weigh too much and store too little energy to make a car that will perform on a par with one powered by an internal-combustion engine. It's physics. The Volt — 40 miles on a charge? (Then the gas engine kicks in to keep you going.) Come on, get real!

    4. Bobbie says:

      What are you saying, Jeff? You emulate government beyond peoples' control over the peoples' own? why do you want GOVERNMENT to help kick start what the people have freely done for themselves without influence, coercion, manipulation, expense, etc of unethical, unconstitutional controlling entity of government?

      5 mins to fill a tank. 8 hours to charge a battery. Battery costs outrageous. Both energy sources in one car, now two to maintain, both flammable and falsely implemented by coercing man made global warming hoax supported by the President of unruly authority keeping it paid by thieving those uninvolved, while closing electric mfg by debilitating the coal minds under the man made global warming hoax. If any of these people including the President were better than destroyers of all that is productive, you'd think they'd appreciate the truth asap to let Americans be free to commence America's economic recovery… if horse and buggies were more profitable the people would make their choices through influences of their own. And free to initiate and conduct business…
      the point isn't the GOP, DFL, IND, CON, COM, SOC, FAC, TOT, ETC. the point is removing government where they do not constitutionally belong so people can live free and with the liberties their lives personally build, not rights and liberties appointed by the federal government.

    5. Cajunwarthog says:

      America loves "winners",,,,, but the Volt is a gov't enabled "shot in the dark". I live in the city, ok,,,, small town and I would not own one. Volt is just a big loser!

    6. Paul Scott says:

      Bobbie, since you don't like government involvement in business, then I trust you support the elimination of all tax incentives for the oil industry. And since we spend $80 billion/year in military costs protecting our access to oil (http://www.rand.org/pubs/monographs/MG838.html) then you no doubt insist that those buying gas pay for that subsidy, estimated to be 55 cents/gallon. Since that $80 billion/year doesn't count the war in Iraq and its $1.5 trillion price tag (not counting the dead and wounded soldiers), then you clearly want to add more taxes to cover that. Maybe $1/gallon for about ten years.

      Then there are the thousands of Americans who die prematurely every year due to the effects of internal combustion pollution. Seems someone should pay for that. Add another $1/gallon.

      The environmental degradation of extracting, shipping, refining, distributing and burning of that oil caused tends of billions in damage every year, so throw more taxes on the price of gasoline to pay for that.

      As long as you are OK with all of the above, then I'd support your move to eliminate the incentives for EVs. Otherwise, please explain why oil should get this privileged treatment it's enjoyed for over a century.

      • Bobbie says:

        Your claims are distorted. I'm not okay with that. You are not a person of reason and lack considerations to all necessary that shows your ignorance…

        please explain where "this privileged treatment it's enjoyed for over a century" is? I agree with removing all unconstitutional government entities and wasteful spending in government to be determined by those who know and have the common decency of integrity of what waste is to take the proper measure of removing without compromising the oath of government and those involved and the protection of America! As long as you understand to realize the truth and would rather live by it when it comes to government beyond your control, I'd support you.

    7. Chloe says:

      the cruze is a great car–great reviews and stiff competition for the toyota corrolla, honda accord, and ford focus. Since chevrolet has a successful small sedan already on the market, as well as their new volt, the newly released, "chevrolet sonic" semi-perplexes me…certain trims boast a 29/40 mpg with a pricetag starting at $13,865. The volt fuel economy is comparable to the new sonic…but costs $31,000+ more…is the sonic the hastily introduced non-electric alternative to the volt?

      there are two good alternatives to the volt with affordable price tags now available on the chevy line. chevy's own cruze and new sonic may be the nail in the coffin for the struggling volt.

    8. Chloe says:

      the cruze is a great car–great reviews and stiff competition for the toyota corrolla, honda accord, and ford focus. Since chevrolet has a successful small sedan already on the market, as well as their new volt, the newly released, "chevrolet sonic" semi-perplexes me…certain trims boast a 29/40 mpg with a pricetag starting at $13,865. The volt fuel economy is comparable to the new sonic…but costs $31,000+ more…is the sonic the hastily introduced non-electric alternative to the volt?
      chevrolet now has two alternatives to the volt on the market- the cruze and sonic maybe the nail in the coffin for the volt.

    9. elmer t. says:

      I still doubt electric cars will make it in the future. Maybe except if new innovations of solving its present downsides are developed. My good friend of mine bought a Nissan Leaf just a few months ago. She and her husband were thrilled about the purchase being a zero emission and eco-friendly car which thus improve the environment by making it a greener. With this, they will never worry about gas prices as they don't need them. They're happy because they saved around $7,500 due to government tax incentives. Yes, they may have all these perks but when you think of its cons you wouldn't attempt to buy one. An electric car compared to gas-powered car is made of a complex system which has new set of auto parts that I believe is very expensive especially its battery. I don't like the fact that it can't travel long distances. It makes you consider the distance you are going to travel before you go on the road. Another is that there are not so many charging stations available and it takes longer to charge them. Well let's just see what will happen in the future.

    10. elmer says:

      I agree! Even if the government will continue to support the production of this electric cars and give tax incentives, still I think it won't make it. It won't be that successful.

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