The Chevy Volt Saga Continues

Uncategorized

When it comes to the Chevy Volt, the market has spoken. The Volt is not ready for prime time.

The facts are clear. GM sold 7671 Volts in 2011, short of its target of 10,000. GM sold about 1600 Volt in January and February this year, a far cry from the pace needed to reach the 45,000 target for 2013. The average household income of a Volt buyer is $170,000. Mainstream America is rejecting it.

Perhaps allegations of battery fires are to blame. Perhaps Americans are leery of a battery-operated car that can’t go beyond 40 miles before shifting to gasoline. Perhaps the $40,000 price tag is a bit steep. Perhaps the $7500 government subsidy isn’t enough.

There is little the President can do about these problems, except for one. On Wednesday, he proposed an increase in the Volt subsidy to $10K. Put another way, President Obama is proposing that $10,000 be transferred from taxpayers who choose not to buy a Volt to each taxpayer that does. $7500 was already $7500 too much.

In President Obama’s world, the Chevy Volt simply cannot fail. It’s a referendum on the GM bailout, the UAW, and “green” energy all rolled into one.

Apparently GE’s recent commitment to purchase 12,000 Volts wasn’t enough to boost sales. Don’t think for a moment that Obama’s ties to Jeff Immelt didn’t influence this decision. And don’t think for a moment that Immelt will actually drive a Volt on a daily basis.

President Obama simply does not respect markets. When consumer choice doesn’t deliver the outcomes he thinks are best for society, the President castigates the producers or manipulates the markets altogether with taxes or subsidies. When healthcare and gasoline cost too much, greedy producers are to blame. But when solar energy and Chevy Volts cost too much, greedy or ignorant consumers are the problem. While the President doesn’t refer to consumers as greedy or ignorant, his actions tell the story. He blames us for consuming more than our “fair share” of global oil while bribing us with tax dollars to buy more Volts. To the President, American consumers just aren’t capable of managing their own economic affairs without a heavy dose of central planning.

Perhaps the Volt will be a competitive car one day. New technology can take some time to develop, and I don’t have any problems with the Volt per se. I simply oppose the use of taxpayer funds to pick winners and losers in the effort to improve energy alternatives. This includes bailout funds, special tax breaks for GM, and subsidies for those who purchase Obama-approved products. Markets can do this more efficiently without Washington’s interference. Obama’s interference with market activity is both costly to taxpayers and counterproductive for society.

7 Comments

7 Comments

  1. Bradley S. Rees  •  Mar 9, 2012 @12:49 PM

    Great analysis, as always, Doctor.
    It seems Obama’s lack of foreign policy experience has foiled him again. A “land war in Asia” is always regarded as a fatal enterprise, and with this administration’s domestic war on four fronts: fighting Christendom, oil producers, producers in general, and the 50% of us who actually pay taxes, it seems a “land war in Asia” is exactly what he’s stepped into.

    The Volt is an unmitigated disaster, precisely BECAUSE government forced the isssue. The only way any product or initiative can be truly “green” is when it can generate profit, and not just for those few well-connected individuals, but for ALL of the investors (not taxpayers).

    Next time I have you on my show, perhaps we can discuss the cognitive dissonance of gas prices/drilling, through the lens of Wickard v. Filburn? ;)

  2. jerry wilson  •  Mar 9, 2012 @5:40 PM

    how long before the government replaces its entire fleet with volts?

  3. Aliza  •  Mar 11, 2012 @1:34 AM

    It is okay to criticize Obama for saving American company that is on its way back now and for saving thousands of American Jobs in Detroit. But why is the idea of fuel- efficient car a disaster? it will help fighting global warming and reduce gas prices.

    Every president comes with its own agenda that affects different aspects of our lives. Obama has a green ( trees , not $$) agenda. Didn’t Bush had an agenda when he dried budgets for stem cells research and left America behind Europe in this field?

  4. jerry wilson  •  Mar 11, 2012 @11:05 AM

    Aliza—The idea of a fuel-efficient car is not a disaster. The idea that government can help create it is. Just because something is a good idea doesn’t mean government should do it!

    Obama’s green agenda has given us limited drilling permits and high gas prices, boondoggles like Solyndra, and crony capitalism where private companies aim to please bureaucrats instead of consumers. Bush was an average president and is irrelevant to this discussion.

  5. Arthur W.  •  Mar 13, 2012 @9:29 PM

    If Obama’s agenda is global warming, why is he encouraging the Saudis and Brazil to produce more oil? Maybe U.S. warming is a more accurate term. Obama’s true agenda is control of industry and the economy through regulation, fiat or whatever means he chooses. That includes the environment.

  6. Aliza  •  Mar 14, 2012 @12:46 PM

    I guess he tries to minimize his ecological footprint?

  7. bill  •  Mar 15, 2012 @3:05 PM

    I guess he tries to minimize his ecological footprint?
    —————————
    Really? The Volt will go less than 30 miles on a full charge of electricity, and when the gas kicks in after that it gets around 30MPG, all at a whooping 42K, and the rest of the taxpayers are paying 7.5K to subsidize it. In 1977, I bought a new Toyota Corolla. I drove it for 150,000 miles and consistently got 37-39 MPG, and it was safer because it had a lot more steel in the chassis. Why did it get really good mileage? #1 it ran on a carburetoration system not fuel injection system without any smog equipment to drag down the mileage. #2 No inefficient corn fouling up the fuel. #no big heavy batteries made from materials that China controls 98% of the world market of.