Nissan Leaf and Chevy Volt subsidies force Americans to root for failure

Even the New York Times seems stunned by the massive government handouts being used to goose sales for electric cars. With the Nissan Leaf going on sale in December 2010, and the Chevy Volt to follow, the American people are about to be victims of yet another boondoggle funded on our backs and the backs of our children.

Of course, America is facing huge annual budget deficits indefinitely, and a massive federal debt. So every Nissan Leaf and Chevy Volt sold will add roughly $10,000 to the federal debt, plus interest every year for as far as the eye can see, with some of that interest going to America’s foreign adversaries.

As the Times puts it:

Since Mr. McNaughton, a lawyer in Nashville, paid his $99 deposit, he has been bombarded with government incentives — promises of a $7,500 federal tax credit, a $2,500 cash rebate from the state of Tennessee, and a $3,000 home-charging unit courtesy of the Energy Department. …

The government subsidies are shaving thousands of dollars off the Leaf’s $32,780 sticker price….

“It’s almost shocking how many subsidies are available on the Leaf,” said Jeremy P. Anwyl, chief executive of the auto research Web site Edmunds.com. “We are putting a lot of money behind this technology.”

Nissan expects the typical Leaf buyer to fit a highly desirable demographic: affluent, college-educated consumers in their mid-40s….

… the Leaf is being built in Japan, with assembly at the new plant in Tennessee beginning in 2012….

So far the only electric cars available in the United States are made by small companies, like Tesla Motors, and are prohibitively expensive for most buyers (the Tesla Roadster is priced at over $100,000). Other automakers are in various stages of introducing electric vehicles to the market, and General Motors is preparing to bring out the Chevrolet Volt, a $41,000 model that runs on electricity but is not all-electric because it has a gas engine to extend its driving range.

… Ken Muir, an engineer in San Jose, Calif. … is also a bit giddy about the level of financial support he will get — the $7,500 federal tax credit as well as a $5,000 credit from the state of California, and another $2,000 federal credit toward the purchase of a charging unit.

The Obama Administration tries to make the subsidies more palatable by laundering them through individual consumers–”affluent, college-educated consumers in their mid-40s”! But in reality they are also handouts to Nissan, GM and Tesla. Guaranteeing $7,500 or more for each electric car sold allows these companies to raise prices for these costly lemons. YOU are paying so your affluent neighbor can appear virtuous. Some virtue.

Edward Niedermeyer, editor of The Truth About Cars website, summed up the essence of this calamity with his devastating NY Times op-ed piece:

So the future of General Motors (and the $50 billion taxpayer investment in it) now depends on a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car. … Quantifying just how much taxpayer money will have been wasted on the hastily developed Volt is no easy feat. Start with the $50 billion bailout (without which none of this would have been necessary), add $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.

Sadly, because the electric car industry is being built on forced subsidies from taxpayers and deficit-spending, rather than a free choice in a market economy, the American people must root for these electric cars to be a failure.

UPDATE 11/11/2010: GE announced today that it will purchase 25,000 electric cars through 2015, beginning “with an initial purchase of 12,000 vehicles from General Motor Co., starting with Chevy Volt in 2011.” If companies are eligible to receive the controversial $7,500 federal tax credit, that would mean America’s children and grandchildren can thank GE and the Democrats for adding another $90 million to the federal debt.

UPDATE 3/4/2011: Recent sales totals: Chevy Volts sold. January 2011: 321. February: 281. Nissan Leafs (or it it Leaves?!) sold. January 2011: 87 Leafs. February: 67. Grant totals to date. Volt: 928. Leaf: 173.

That’s still millions of dollars stolen from our children in higher federal debt and annual interest payments forever; but it could be worse. Just wait ’til the Feds start their massive buys of these lemons for the federal fleet. November 2012 can’t come fast enough.

UPDATE 6/10/2011: Car dealers are “buying” Chevy Volts, pocketing the wasteful tax credit, then reselling the cars as used. Each time increasing the federal debt and weakening America.

Category: Economy, Federal debt and deficits, Global warming, Government control
Tags: Chevy Volt, electric car, GE, GM, Green Scams, Nissan Leaf, Tesla