Some days you just can't give stuff away and the electric car is the white elephant from the Obama administration.
Government Failure: Two years ago the president announced his goal of putting 1 million electric cars on U.S. roads by 2015. Did he mention that to reach that target the unpopular cars might have to be given away?
The market for electric cars is so weak that consumer costs are approaching almost nothing. The Wall Street Journal reported Wednesday that in order to "spark buyers for electric cars," there is a need to "drop the price to nearly $0."...
It's not quite there yet, but it's moving in that direction. Obama, with his knack of doubling down on stupid, has done it again with electric cars.
Despite taxpayer money already wasted on forcing a technology that's not ready, President Obama last month proposed raising the Energy Department's vehicle research budget by 75% — adding $575 million in spending. He also wants to raise the federal tax credit for buying an electric car from $7,500 to $10,000.
This comes even after he proposed to spend $5 billion on the 1 million-electric-cars promise...
Let's compare American consumers for electric cars to American consumers for the quintessential pickup truck.
The truth that Obama and the political left won't acknowledge is that Americans don't want these cars that they're forced to subsidize. Sales of the Chevrolet Volt, the most popular plug-in electric, were only 23,461 last year. (Shouldn't Chevy be grateful for poor sales, since it loses as much as $49,000 on each Volt it builds?)
Compare its sales to those of an automobile the public really wants: Ford's F series pickup trucks, of which more than 645,000 were sold in 2012...
Sorry facts do not fit any of your "talking points".... or should I call them Pure Propaganda? Feel free to counterpoise ANY of the following points. Hint: You cannot do so using facts.
ReplyDelete1. Your purposefully deflated number of 23,461 sales are off from the actual number (31,400) by 33%. I suppose you do not consider EXPORTS to other countries important, huh?
2. 2012 was Chevy Volt's first year. Chevy Volt generated $1,000,000,000 (nine zeros, no typo)... That is GREATER by a large margin v. year 1 of the Toyota Prius. Prius is now the #3 nameplate worldwide. Not a bad template to follow.
3. Chevy Volt technology has already been applied to much higher volume Buicks and Chevys (eAssist), which generates an additional $4-5B per year.... by the way, these cars can reasonably be applied towards an electrification of cars goal.
4. The $49K "loss" number is absolutely, definitively PROPAGANDA MATH. It was based on only 21K sales (only a few months of sales). The technology will be used for 10+ years. You cannot amortize over only 21K units for a technology that will be around for decade.
It would be like you building a bridge for $100,000,000. I could stop by one day and watch 100 cars pass and declare "Will's boondoggle costs an astounding $1,000,000 per car!". People who look at the math for 45 seconds can see right through it.
5. People gravitate toward facts much more than propaganda. Proof? 11.06.2012.
... Have a nice day Will Profit!
Awesome that you replied. I am very impressed. Also, I guess you share ... this blog. Sorry about that... I supposed I should have stated "Rob" instead of "Will"... I thought "Will Profit" was a pen name for Rob.... now on to the debate:
ReplyDelete1. Exporting a Volt has MORE value than domestic sale. GM actually generates $50K of revenue v. $40K on export sales. It is also good for our country to actually have a product that the world wants.... if you care about that kind of thing. The Japanese government did with the Toyota Prius, which is now the #3 nameplate worldwide, and a cash cow (despite still being mocked by the narrow minded right).
Not sure how you are "subsiding foreigners", but exporring? Once an R&D/tooling expense is made, the goal is to sell as many as possible, because that expense is fixed. This is Amortization Accounting.
2. The Chevy Volt launched nationally (every state) on 11.01.2011. Before that, for the most part was only sold in 6 states and the Washington DC. So its first full year was 2012. That is a fact.
3. Every other major automaker is scrambling to catch up with GM in electrification. GM's competitive advantage is Voltech. It has patents, testing, and years of a head start. Chevy Volt derivative technology is eAssist. It leverages the same R&D... just like the Camaro leverages the R&D of the Corvette.
eAssist equipped cars have successfully boosted year-over-year MPG by ~30%. Name ONE other automaker that can boast that. If it were so easy, wouldn't every automaker have all there car's boost their mileage that dramatically last year?
4. The bridge example is illustrative. A bridge could be around for 20 years before needing any major expense. However, if only watch a 100 cars pass, you are clearly understating its value/car. $1M/car cost is just keeping the math simple. If you watched 1000 cars pass, the cost per car would be $100... or if you watched 100,000,000 cars pass, the cost per car would be $1. The fake $44K number uses the same amortization hoodwinking.
$1.5B is Chevy Volt's initial R&D and Tooling. You can use the same fuzzy amortization in reverse to reduce that number down to $25 (not $2500 or $250, just $25). In fact that has already been done:
http://www.thestreet.com/story/11354404/1/setting-it-straight-chevy-volt-vs-the-government.html
Finally, consider that Big Oil Corporate Welfare conservatively is $30,000,000,000 per YEAR (Tax credits, military protection, oil spill cleanups, infrastructure spending). Why are you so concerned with the pennies that go to EVs, but are ignoring the $100Bills that are going to Big Oil?
The Chevy Volt is subsidized by taxpayers. It could not survive in the market place without that subsidy, period.
ReplyDeleteTaxpayers are subsidizing every car that GM produces and sells or leases since GM still owes the American taxpayer over $23 BILLION dollars, which GM, according to all analysts, will NEVER be able to repay since the repayment is based upon the price of GM stock held by the federal government and GM stock simply does not have the growth potential to repay the stimulus poured into it by the federal government.
The six markets GM rolled out for the Volt are virtually the only markets buying/leasing Volts today, so that is a false argument on your part. California continues to buy/lease two-thirds of all domestic Volts produced. So claiming that GM really rolled out the Volt in November 2011 is a misnomer itself. The Volt market has not expanded exponentially in the remaining 44 states since its initial sales in those markets.
Volt production to date has totaled 45,000 units with 8,000 of those units being exported. The true cost of an export Volt still does not include the actual cost of production for GM nor will it ever include the GM stimulus costs. Essentially GM is getting a free ride thanks to taxpayers like me.
The second generation Volt is expected to roll out in either 2015 or 2016. R&D continues to be pumped into the Volt Gen II to keep up with changing technology, thus amortization, which you are so enamored with, will continue to grow, albeit at a yet to be determined rate.
What I don't understand is why you insist on me, as a taxpayer, paying to help someone else buy or lease a Volt for their benefit? I am a free market capitalist. I say, let the market decide what it wants and let the market pay for its resulting decision. Marxist socialists want to alter the market forces of consumer choice by initiating a command economy which imposes dictates upon the market in the form of an economic taking from one group to support another group of the government's choosing.
If GM's Volt could be produced without a taxpayer subsidy, I would not have a problem with it. My fundamental problem lies with GM, which has robbed taxpayers, in order for GM to even claim it is making a profit at all. The Volt is simply the most egregious example of GM's failure to make a legitimate profit, free of government assistance. GM's relationship with the Obama administration is simply crony capitalism for the benefit of those two entities at the expense of all taxpayers.
Thanks for the response. I would love to post some of this on my blog and would challenge you to a debate on an open forum at a specified time. I think we would both find it fun!
ReplyDeleteJust a couple of comments:
1. Why no regard at all for the $30,000,000,000 per year in Big Oil Corporate Welfare? Pennies go to EVs for the $100 bills to Big Oil. There is no logical way around that that fact. Big Oil gets all kinds of free goodies from taxpayers. "Big Brother's Koch" do not mention that in their talking points do they?
Why do you insist that me, the taxpayer pay for fixing up bad roads caused by wear and tear of big tanker trucks inefficiently hauling "dictator fuel" that we must pay with our military in both direct military protection and indirectly in lives lost in dubious wars that have little direct connection to national security, but do have an obvious connection to the Oil Industry? [Meanwhile, most of my energy is delivered via power lines at night when there is wasted electricity bandwidth that is domestically produced and safety and efficiently transmitted].
Why do you insist that me, the taxpayer have to make up for the tax revenue lost by Gulf Coast businesses decimated by BPs oil spill? Why do my tax payer dollars have to go to cleaning up that mess?
2. Sounds like there is still a growth opportunity for GM in other states (v. CA)? Is that a bad thing that the market is just forming now?
3. "Volt could not be produced without taxpayer subsidy" is putting he entire burden of GM to the government on just one car? Is that fair?
The logical argument re: the Auto Loans is a separate one re: the "George W Bush $7500 EV Tax Credit of 2008" which was signed by a Republican President almost a full FOUR YEARS before the Volt was introduced nationally.
That is tax credit is not all that different from mortgage interest deduction (is that "crony capitalism"?) or the "If-you-are-rich-just-declare-yourself-a-small-business-to-buy-a-mega-SUV-for-yourself" deduction loophole that has been around for years. A tax credit is very different than a direct tax payer handout.
4. Apple, Google, Facebook all do not exist without government spending on R&D for technology that they have leveraged profitably.
I'm off to the vet with my Golden Retriever and then off to a minor league baseball game this evening. I'll try to set aside some time for a reply on Sunday since the opportunity is so ripe to refute your 'all over the board' game.
ReplyDelete> "If GM's Volt could be produced without a taxpayer subsidy,
ReplyDelete> I would not have a problem with it."
I expect it will be, within 5-10 years. Now that we're getting a head start like hybrids did got when they first came out - Toyota is doing remarkably well with it's Prius thanks to that. The fact is, these subsidies work just like they are intended to, and that bothers you because of your ideology. You're right, without them, the EV market would crash and burn. With them, it will soar, in time. You must be haunted by nightmares of the future - a horrible world where our country won't be crippled during the next OPEC oil embargo.
It's late Tuesday. No reply to bobblehead?
ReplyDeleteGuess that opportunity to crush his arguments wasn't so ripe after all.
ReplyDeletehttp://freebeacon.com/electric-cars-need-subsidies-to-be-competitive/
ReplyDelete