Nevertheless, while many would argue that government subsidies are counter-productive, a market intervention that distorts the actual price of the vehicles, that belief is certainly not shared by those in the Obama administration who have proposed raising the maximum tax credit for electric vehicles (EVS) from $7,500 to $10,000 beginning in fiscal 2013.
Of course, it should be noted that the Obama administration’s attempt to artificially drive down the cost of the Chevy Volt on the backs of the American taxpayer is being fueled by its belief in the Volt as a major cornerstone of the President’s green energy policy.
That belief was on display most recently in the President’s January State of the Union address in which he promised that his administration’s goal was to have one million electric vehicles on the road by 2015. Unfortunately for the President, those numbers, according to a Department of Energy report, included GM selling 120,000 Chevy Volts in 2012 and 500,000 of the overall million sales by 2015.
Yet, while consumer reluctance toward the Volt may be growing, the Obama administration has other avenues by which it may reach its million EV quota, in particular from companies which have been major beneficiaries of “green handouts” from the Obama administration.
For example, General Electric, which builds the charging stations for EVs, has announced that it will be purchasing only Chevy Volts for employee use, including 25,000 EVs by 2015 for its own global fleet and 65,000 for customers in its worldwide fleet management businesses. Moreover, GE has also committed to buying some of the first Volts built in China, with the caveat that it receives the contract to build the charging stations there.
In addition, the Electrification Coalition reported that Fleet operators of America’s 16 million government and commercial trucks, vans and cars will buy more than 200,000 all-electric and plug-in hybrid cars between 2011 and 2015.
Still, despite that outside assistance, selling a million EVs will be a tall order, especially given that rising gas prices have failed to provide a needed stimulus for consumers to buy electric.
That fact wasn’t lost on Republican Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, who recently said, “Even as gas prices continue to climb, President Obama’s attempt to manipulate the free market and force consumers into purchasing electric vehicles like the GM Volt has failed.”
Adding insult to injury, even the environmental benefits of the EVs have been brought into question, evidenced most clearly in a recent report by Britain’s Department for Transport which found that electric cars could produce “at least 50 percent higher” emissions over their lifetimes than gas equivalents because of the energy consumed in making their batteries.
Still, despite it all, some continue to remain bullish over the Volt’s future prognosis, such as former GM Vice Chairman Bob Lutz, who said recently that “the Volt is a bases-loaded home run. It will overcome.”
Hopefully, Lutz is correct. Currently the loss to US taxpayers over the $60 billion auto bailout given to GM has been estimated by The Treasury Department at $23.4 billion.
That loss will only continue to grow as GM remains committed to produce a car that does little to lessen dependence on foreign oil, help the environment, and which the vast majority of Americans neither can afford or want.
Still, there is one person who is on record as being a future Chevy Volt buyer. Days before GM announced its production halt of the Volt, President Obama was praising the car at a United Auto Workers campaign event in Detroit, saying, “Five years from now when I’m not president anymore, I’ll buy one and drive it myself.”
Of course, by that time, given its downward sales trajectory, the Chevy Volt may be a collector’s item and then truly worthy of its current price tag.
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