Wednesday, December 21, 2011

The Chevy Volt story just keeps getting better and better


A study by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, has shown that between direct subsidies to GM and indirect ones to GM subcontractors and parts providers, there may be as much as $250,000 worth of subsidies in each $41,000 Chevy Volt.

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.

The Volt subsidies flow through multiple companies involved in production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. For example, the Department of Energy awarded a $105.9 million grant to the GM Brownstown plant that assembles the batteries. The company was also awarded approximately $106 million for its Hamtramck assembly plant in state credits to retain jobs. The company that supplies the Volt’s batteries, Compact Power, was awarded up to $100 million in refundable battery credits (combination tax breaks and cash subsidies). These are among many of the subsidies and tax credits for the vehicle.

And how exactly are those Chevy Volt sales coming along? Eh, not so hot as Neal Cavuto chats with Mark Modica, an Associate Fellow of the National Legal and Policy Center.

6,000... 4,000 short of General Government Motors goal of 10 grand. And those numbers would appear to be padded by fleet sales to government agencies and others in the regime's crony circle like, General Electric.

It should be noted that we are not opposed to electric cars, per se. What we are opposed to is the subsidization of technology that is clearly not market-ready. Giving the evil rich a $7,500 break on the sticker price is ridiculous enough (are you listening #OWS?). However, and for the sake of argument, let's say that $250,000/unit subsidy figure is high... way high. Let's say its merely a third of that. So, now you have the Chevy Volt being subsidized to the tune of around $85,000 which is still over twice the sticker price! All that money dumped into it and still no one wants to buy it.

Ladies and Gentlemen, that is patently absurd and there is just no other way to look at it.

We forgot where we saw it, but there is apparently legislation pending in the house that would get rid of the purchase rebate. That's a good start but Congress needs to gut this entire crony charade from top to bottom.


B-Daddy said...

Green jobs? Seems like green jobs are only created with government subsidies or tax credits. When those dry up, so do the jobs. Sometimes even those aren't enough, see Solyndra, and no jobs are created at all.

SarahB said...

Cripes, if they are going to spend that much per car, they might as well throw in solar panels for the owners to charge the cars while they're at it. If you're going to build a beast, really build it.

Dean said...

Sarah, love it! Great idea. So, the problem with this green tech loan program is that they just aren't thinking big enough.

Harrison said...

I read that the last car that got this much government support was the Trabant.

Doo Doo Econ said...

The problem with the addition of solar panels is that during working hours/solar panel hours the cars will not be at home. UNLESS you get another car to drive to work...

Then if you have 2 electric cars which you can alternate, or if the second car is combustion engine, you can save the electric cars for the weekends. Thus electric cars will be seen as an even greater status symbol!

Dean said...

Harrison, with about as much success as the Trabant.

Sir Charles, I imagine the statist wet dream is to be able to generate electricity from... electricity!