Washington Post: Electric Car Folly

From the (liberal) Washington Post:

GM’s vaunted Volt is on the road to nowhere fast

By Editorial Board, Editorial Board

The Washington Post

AS A CANDIDATE for president in 2008, Barack Obama set a goal of getting 1 million all-electric and plug-in hybrid vehicles on the road by 2015. In February 2011, the Obama administration’s Energy Department issued an analysis purporting to show that, with the help of subsidies and tax credits, “the goal is achievable.” This was a paltry claim in the first place, since 1 million cars amount to less than 1 percent of the total U.S. fleet. Yet it is increasingly clear that, despite the commitment of many millions of taxpayer dollars, the United States will not hit Mr. Obama’s target by 2015. A recent CBS News analysis suggested that we’ll be lucky to get a third of the way there.

The Energy Department study assumed that General Motors would produce 120,000 plug-in hybrid Volts in 2012. GM never came close to that and recently suspended Volt production at its Hamtramck, Mich., plant, scene of a presidential photo-op. So far, GM has sold a little more than 21,000 Volts, even with the help of a $7,500 tax credit, recent dealer discounting and U.S. government purchases. When you factor in the $1.2 billion cost of developing the Volt, GM loses tens of thousands of dollars on each model.

Some such losses are normal in the early phases of a product’s life cycle. Perhaps the knowledge and technological advances GM has reaped from developing the Volt will help the company over the long term. But this is cold comfort for the taxpayers who still own more than a quarter of the firm.

The Energy Department predicted that Nissan, recipient of a $1.5 billion government-guaranteed loan, would build 25,000 of its all-electric Leaf this year; that car has sold only 14,000 units in the United States.

As these companies flail, they are taking the much-ballyhooed U.S. advanced-battery industry down with them. A Chinese company had to buy out distressed A123, to which the Energy Department has committed $263 million in production aid and research money. Ener1, which ran through $55 million of a $118 million federal grant before going bankrupt, sold out to a Russian tycoon.

No matter how you slice it, the American taxpayer has gotten precious little for the administration’s investment in battery-powered vehicles, in terms of permanent jobs or lower carbon dioxide emissions. There is no market, or not much of one, for vehicles that are less convenient and cost thousands of dollars more than similar-sized gas-powered alternatives — but do not save enough fuel to compensate. The basic theory of the Obama push for electric vehicles — if you build them, customers will come — was a myth. And an expensive one, at that.

In our Public Policy class, we warn students about the dangers of the “Warm Fuzzies School of Policy Analysis.” This way of thinking doesn’t ask tough questions about whether something if economically viable, whether it’s the best approach to a social problem, or even whether it’s scientifically possible. It just endorses anything that gives the person the warm fuzzies. If solar power, or wind energy or electric cars give one the warm fuzzies, it immediately follows that one’s fellow citizens should be taxed to support it, and if necessary coerced to use it.

The really good ideas, of course, can find private financing — there is a huge amount of venture capital in the U.S. economy.

(But private venture capital is derided by people like Barack Obama.)

The things that really make people’s lives better are things they will happily buy, and indeed line up to buy.

But the pet projects of elites have to be imposed on the citizenry.

Obama’s Edsel

From Rich Lowry in National Review Online:

President Barack Obama says he wants to buy a Chevy Volt when he’s out of office in five years. If getting into a General Motors electric automobile means so much to him, he’d better hope he loses in November. What the president dubbed the “car of the future” in a visit to a Volt plant may not make it to January 2017.

The partially government-owned General Motors has suspended production of its government-approved miracle car and temporarily laid off 1,300 workers at a Detroit plant. The halt is the result of a piddling detail lost in the gushers of praise for a big, bad car company supposedly learning the error of its environment-destroying ways — people don’t want to buy the damn thing.

GM hoped to sell 10,000 Volts last year and sold only 7,500. It planned to sell 45,000 this year and is scaling back production to meet the real rather than the imaginary demand. The Volt is the Solyndra of automobiles, another Obama-touted recipient of government subsidies that was succeeding as a great paladin of the future in all the speeches and press releases until it ran into hard market realities.

The Volt is too expensive, too small, and too complicated to appeal to all but a tiny slice of what is already a tiny segment of the car market. Hybrids have never been more than about 3 percent of all U.S. sales. To buy a Volt, you need the money to splurge and the exquisite environmental consciousness to think plugging in your car will help save the planet, even though about half of electricity comes from coal. The Volt is as much affectation as car.

It costs more than $40,000. At that price, perhaps GM should have made it part of the Cadillac brand rather than Chevy. Most buyers dropping that much prefer to go all the way and buy something really nice — say, an Audi or a BMW.

According to GM, the average income of a Volt purchaser is $175,000 a year. These well-heeled buyers get a $7,500 tax credit for selecting a car out of reach of many Americans, a trickle-up redistribution toward the upper, politically correct end of the car market.

It’s not that the Volt isn’t a fine piece of machinery. It is a smooth ride and has been well-reviewed. It’s just not going “to make Big Oil sweat,” in the words of a smitten writer for the New York Times. Big Oil presumably has other things to worry about than a rounding error in the more than 12 million vehicles sold in the U.S. every year.

As Henry Payne of the Detroit News argues, the Chevy Volt is basically the electric version of the gas-powered Chevy Cruze. Despite the Environmental Protection Agency’s rating that the Volt gets 60 miles per gallon, as a practical matter it’s more like 35 (it can go less than 40 miles on battery alone and then needs to switch over to gas). That’s comparable to the Cruze, which costs half the amount, has greater range, seats more people, and is easier to operate since all it requires is a visit to the filling station. GM sells more than 200,000 Cruzes a year.

The Volt is looking like Obama’s Edsel. What the president so confidently deems “the future” when he talks of energy and cars is his ideological vision dressed up in the language of historical inevitability. If he had been told in 2009 that the real future of the car market would be trucks, SUVs, and the like, which again ticked above half of sales, he surely would have blanched. If he had been told that technological breakthroughs would bring a future of new oil production, he would have been no less insistent on funding the likes of Solyndra.

For all his smug confidence about his vision of the future, he doesn’t truly know what car he will be driving in five years. If he stays true to his word, it might have to be a secondhand Volt.

Ultimately, the liberal obsession with “sustainability” comes down to raw cultural bias.

Liberals resent mass affluence. The believe they are entitled to live better than other people, but ordinary Americans live in nice houses, own big cars, drive in from the suburbs to work and go where they want to go.

They vote against gay marriage and sometimes elect Republicans.

They are, in other words, uppity.

Since elitist liberals have trouble distinguishing themselves by consuming more than ordinary Americans, they have to distinguish themselves by consuming differently.

Thus they despise the vulgar affluence of the masses, while consuming politically correct luxuries. Hybrid cars. Fair Trade coffee. Exotic cuisines.

And of course they deride the tastes of ordinary Americans, whose affluence and political power they resent.