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It all started when I wrote a few opinion articles about the high cost of cars and electrification; and that total value has to be taken into account. The responses, though, have introduced another angle that taxpayers need to read: Most buyers of these EVs can afford it and do not need subidies.
First, I like and support the electrification of the automobile. However, I do not support taxpayer subsidies, especially when those who buy these Volts, Leafs and Focus EVs can afford a BMW 3 or an Infiniti G.
My comparison of the Chevy Volt to the Cruze began, because the government and GM marketing have been touting electrification for the masses. After all, how else can they support subsidies? It is supposedly for the better good. So far, no problem. However, it is obvious the masses cannot afford a $42K Volt even with a government subsidy of $7500.
Fact is, the masses are stretching to pay for a $220 lease for a Chevy Cruze. So, I naturally opted to challenge the thinking of the value of the Volt beyond its green adoption. Then I received a number of comments below the articles. Read: the following articles and the comments below them:
GM CEO Akerson dismisses price factor with building 60,000 Chevy Volts in 2012
GM and J.D. Power attempt to understand the why behind Chevy Cruze sales
A Shift in Focus!
As Q used to tell James Bond, “Now see here, 007!” Yes, in this case, when we pull the subsidized lever, we get unintended and unfair consequences. Frankly I was surprised at the logic of the Volt owners’ complaints. They seemed miffed of having their special purchase compared to a cheaper car, when they felt the more righteous comparison is indeed the BMW 3 Series and the Infiniti G. Well, excuse me!
With all respect, what we have here is a bunch of folks who feel smart because they bought the better value buy of the $40K car category. And they indeed bought a great vehicle; and they indeed were smart because they let us help pay for it.
Problem is, other purchasers of the BMW 3 Series and the Infiniti G noted in the comments did not receive taxpayer subsidies like the Volt. (Notice that I refuse to call it government subsidy). And the focus now has to shift to the fact that many (perhaps most) of these EV owners CAN afford it, and certainly do not need a subsidy to buy an EV or PHEV; nor should they get one.
What we have here is a government-allowed system that in the future is supposed to meet the needs of the many by meeting the needs of the few first, the richer more than average auto buyer, who admit they can afford BMWs and Infinitis.
My feelings are, if they can afford that market level of vehicle, then they do not need your money or mine via our taxes to support their purchase. If the cars are so great, then let the car’s value stand on its own merit; and get out of our pockets. In time, they will recoup their costs. Right?
Am I the only person who sees these subsidies as unfair, un-American and definitely anti-free market? After all, it is not the job assignment of politicians to choose technologies or people for that matter, then pay them to purchase with a car with our money. The government role is to support technolgy research, but it should end there! Contrary to Whoopi Goldberg who said that communisim looks good on paper, this is not a communist state, because free markets not only look good on paper but actually work in real life, but only when allowed to be free to work. Please chime in!
Of course, this applies to more than the Chevy Volt. It applies to ALL vehicles with a taxpayer subsidy like the Ford Focus EV, the Nissan Leaf, the Toyota Prius Plug-in, the Tesla Roadster, the CODA, etc. not to mention the new line of electrified pickup trucks and vans from VIA and others.
[Photo Source: media.gm.com]
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About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via authorfrank.com. He may be contacted here by email: [email protected] and followed in Twitter under @Authorfranks
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Additional Reading:
GM's CEO Akerson wants to build 60,000 Volt's in 2012
TorqueNews Exclusive: Fred Fresard, attorney for Dykema, addresses Chevy Volt fire
Corporate culture as important as innovation per Booz & Company
New global winners emerging in alternative fuels says Lux Research
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Comments
If you are for the
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If you are for the elimination of all tax write-offs I would agree. In my opinion, if we eliminate the plug in tax break, it should only be as part of a plan to eliminate ALL tax breaks.
UNTIL THEN.....The gov't has been using taxes and tax incentives to influence consumer and corporate behavior and to help jump start new industries since the beginning of time.
The only difference of opinion is which tax breaks you like and which one you don't. Ask 10 people, and you will get 10 different answers on that.
The BMW is based on established technology with 100 years of R&D and mass production already in place. The Chevy Volt is part of a new generation of products with only a few years of R&D, and the parts for this vehicle are not yet in mass production.
In my opinion, it is better to give a tax break to someone who is willing to take a chance on this new technology, and support this new industry, one that could someday help end our country's energy problems.
You have to remember that the take break is not a "Volt tax break" it is a "plug in" tax break that the Volt is one of the 1st vehicles to qualify for. Perhaps the tax breaks given to the Volt and a few other new plug ins can help lead to mass production of a future EV that will be priced in the Chevy Cruze price range....
I suggest that the core
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I suggest that the core premise of your argument is wrong. You cannot make the assumption that "Most buyers of electric cars such as the Chevy Volt... ...can afford the vehicle without subsidies". In addition, I think you miss the greater point and intended benefits of a government subsidy such as those extended to these EV buyers.
Thanks to the available federal subsidy (plus an additional subsidy available in my home state of TN) my family is looking to buy a 2012 Chevy Volt. Without these subsidies we would never consider a vehicle in this general price range and we most certainly don't fit your assumed stereotype demographic of being a buyer with such means.
More importantly, you don't seem to recognize the real benefits of these subsidies to buyers (regardless of their financial means) as well as the American auto industry on the whole. First, it tempts the more able buyers to make a purchase which is beneficial to domestic manufacturers. Something many would likely not give much thought to at all. Buy American vs. the status building image of a German or other European maker? Second, encouraging EV purchases helps the automotive industry (and in this case the American auto industry) develop their product lines with an eye towards the future and a level of product that will likely define the future of that industry in the foreseeable future.
The government subsidies are doing exactly what they were intended to do, they are encouraging American consumers to make a purchase that will benefit the American auto industry, the American environment and the American family budget down the line. All good things, unless you happen to live off the back of the American oil industry I suppose...
You are totally missing the
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You are totally missing the boat on the $7500 tax credit.
The tax credit is not to support the incomes of those buying the vehicle. It is to support those MAKING the vehicle and to stimulate a new industry which can benefit all in the long run.
You have to realize the tax credit was created BEFORE the manufacturers even made the decision to MAKE the vehicles. The tax credit provided an incentive for automakers to make the vehicles in the first place. Without the tax credit we might not see a Volt or a Leaf at all...
A similar tax credit was used for hybrids and now, 10 years later, hybrids are successful and becoming affordable for the masses even though that tax break has expired. The same will happen with EV's in 10 years, if we quit whining and let the tax break run its course.
This is the BEST use of tax dollars in my opinion....
I'm starting to build a
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I'm starting to build a spreadsheet to compare the Volt to the Cruze. (Both cars I have driven and like a lot)
Given the tax credits and lower to no gas costs for the Volt, I'm getting close to making a case that the there is very little premium that one pays to get the Volt over the Cruze. The upfront cost for the Volt is mostly recouped over time thanks to the lack of gas. The only remaining question is what a replacement battery costs. Unless prices come down, that kills the bennies of the Volt.
As a Desert Storm Vet, I look forward to driving one of these someday to my annual Squadron reunion on the Marine Corps Birthday. As far as I'm concerned, any Veteran should get one of these cars paid in full courtesy of the Saudis instead of those crappy little medals they gave us to wear on our uniforms.
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