Get ready for … Cash for Clunkers II?

posted at 3:35 pm on March 29, 2011 by Ed Morrissey

Feel like buying a Chevy Volt?  Probably not, thanks to the steep price tag; the car retails north of $40,000, a high price for a subcompact four-seater.  What you may not know is that you’re already buying Volts, thanks to a tax credit designed to incentivize buyers to select the expensive electric car over less-expensive rivals in its class, a $7500 giveback to push the latest model from Government Motors.  Now Congress wants to speed the subsidy process to make it immediate on purchase:

Ready for another cash for clunkers program? It looks like General Motors is attempting to replace it’s own consumer incentives with tax payer money. The car company, bailed out of bankruptcy in 2009 by the American tax payer, appears to be turning the government into an automatic rebate provider.

The Obama administration and their friends on Capitol Hill are floating around a proposal to change the $7500 tax credit for green vehicles. This change can be found not only in President Barack Obama’s budget but also a bill proposed by Senator Debbie Stabenow, Michigan Democrat.

Edmunds.com, a 45 year old trade magazine company that provides automotive information, posted a Department of Energy document listing the department’s funding highlights. The proposed Obama Budget, changes the existing $7,500 electric vehicle tax credit “into a rebate that will be available to all consumers immediately at the point of sale.”

According to Senator Stabenow’s website, her proposed legislation, known as the “Charging America Forward Act” (S.298), “will provide consumers with a rebate worth up to $7500 for plug-in electric vehicles at the time of purchase.”

While some are calling this Cash for Clunkers 2, as my friend Kerry Picket does in this report, there are a couple of differences.  First, the program does not incentivize trade-ins, only the purchase of the vehicle.  That’s an improvement over the original C4C in at least the sense that it didn’t destroy viable assets.  The 2009 program destroyed cars that lower-income people could have purchased; instead, C4C created an artificial shortage in used cars that pushed prices higher and reduced availability.  Also, this is not a new subsidy, but a new delivery mechanism for an existing subsidy.

That doesn’t make this idea any better.  The Obama administration seems to have belatedly figured out that the people who needed the subsidy to buy the car couldn’t afford to wait several months for the rebate, but it’s still unclear how many sales were actually lost because of that.  Even at $33,000, the Volt is a choice for those with plenty of liquidity.  Thanks to uncertainties over battery life, replacement costs, and disposal, its resale value in the fourth year (when most loans would end) is unknowable, making the Volt a tough sale as an investment for people normally buying at these price points.  People who qualify at the lower price but lacked the cash for the higher price are probably going to look for either more room and features, or for a vehicle with more known qualities, simply because they won’t be able to afford to guess wrong.

This means that the new “Charging America Forward” program does share this in common with C4C: it subsidizes sales that will take place anyway.  It forces taxpayers to foot the bill for the private vehicle choices of others, many of whom can’t afford to buy new vehicles for themselves.  It’s an attempt by Obama and Stabenow to pick winners in a market they don’t understand well as a means to prop up a company that the last two administrations rescued with tens of billions in taxpayer money already, and through a politically-engineered bankruptcy that upended investment law to benefit the unions.

And here’s one last question for the CAF advocates: Just where do you plan to get all of the electricity to charge these cars, anyway?


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“Get ready for … Cash for Clunkers II?”

Sure, the first one was sooo successful! This administration is truly moronic, or they have a very nefarious agenda!

GFW on March 29, 2011 at 3:41 PM

Just where do you plan to get all of the electricity to charge these cars, anyway?

From the outlet…geeeez.
/

Electrongod on March 29, 2011 at 3:41 PM

sorry, boss, i can’t come to work becuase i forgot to plug in my car last night.

hello?

DrW on March 29, 2011 at 3:42 PM

Nobody’s gonna spend even 33 grand on the Volt. You could get a decent car with an internal combustion engine for half the price that’ll last much longer.

Doughboy on March 29, 2011 at 3:42 PM

Debbie Stabenow is my senator. She will do anything for the unions to get them to turn out for her reelection in 2012. Sometimes, she almost makes Carl Levin look principled. Sometimes.

WV736 on March 29, 2011 at 3:43 PM

Rebated $7500 will not be enough incentive for virtually anyone, outside of the wealthy “I need to feel good about myself” folk.

Most everyone would not pay 15K, let alone 30K for a sub-compact with more negatives than positives.

Tim Burton on March 29, 2011 at 3:43 PM

Message to GOP in Congress…

(clears throat, aaheeem)


STOP!!!

Seven Percent Solution on March 29, 2011 at 3:43 PM

It should be impossible to pass this clunker of a bill without House Republican votes.

Any Republican who votes yes should be primaried.

cool breeze on March 29, 2011 at 3:44 PM

New line from teen boys to their dates–Sorry, Susie, we’ve run out of electricity!

Hey, Republicans–just say NO!

Beaglemom on March 29, 2011 at 3:46 PM

Free golf carts for everyone!

http://www.foxnews.com/opinion/2009/12/17/john-stossel-free-golf-cart-green-strategy/

zmdavid on March 29, 2011 at 3:47 PM

Too bad the GOP controls the House. The Democrats could have just passed a law mandating that everyone in the US either buy a Volt or get a waiver from LaHood.

malclave on March 29, 2011 at 3:47 PM

And so this $7,500 in real money goes directly to the cash registers of GM.

So let me get this right: I go and buy a 40K car because I can afford to. And some taxpayer who cannot afford a new car pays for it through his taxes.

Sounds GREAT!

Thank you sir may I have another!

Opposite Day on March 29, 2011 at 3:47 PM

When a process fails, but someone continues to apply it hoping for a different result = Barack Insane Obama

Hening on March 29, 2011 at 3:48 PM

Stop spending!!!!!!!

What will it take for pol’s to hear us?????????

PatriotRider on March 29, 2011 at 3:49 PM

How does giving rebates to those that can afford to spend a $33,000 really helping the middle class?

If you can spend $33,000 on a car, then you can spend $40,000.

WoosterOh on March 29, 2011 at 3:49 PM

The Cash for Clunkers authorization is in the Constitution right next to the gun ban clause, above the abortion on demand clause, by the Medicare & Food Stamp section.

Akzed on March 29, 2011 at 3:49 PM

Clunker Pimp in Chief, Round II…because the first one worked so well.

The U.S. has gone entirely nuts.

Schadenfreude on March 29, 2011 at 3:50 PM

Charging America Forward?! That’s such a clever play on words. Charge. Electricity. I’m so wowed by their marketing genius. But you know, when I think “charge” I also think “charge card”… owned by the American taxpayer. What a gas.

Buy Danish on March 29, 2011 at 3:50 PM

Hey, it good thing we’re not running huge deficits so we can waste all that money, right?

Chip on March 29, 2011 at 3:50 PM

Paying for the Libyan rebels and this, because the Left have solved the budget, the debt, the deficit, and the U.S. does’t know what to do with all that extra cash laying around.

You, your kids and their kids will be doomed. Wake up America, wake up, or perish.

Schadenfreude on March 29, 2011 at 3:51 PM

The Cash for Clunkers authorization is in the Constitution right next to the gun ban clause, above the abortion on demand clause, by the Medicare & Food Stamp section.

Akzed on March 29, 2011 at 3:49 PM

I thought it was next to the “we can start a war with any country we want” clause…

PatriotRider on March 29, 2011 at 3:52 PM

Just where do you plan to get all of the electricity to charge these cars, anyway?

Nuts and corn

shick on March 29, 2011 at 3:52 PM

Electricity rates would necessarily skyrocket
I bought my first house for $49,500, and they want me to pay $40,000 for a battery operated toy car. And it don’t even come with attachments.

Plus, the govmint will eventually track and tax your miles.

Kini on March 29, 2011 at 3:52 PM

And here’s one last question for the CAF advocates: Just where do you plan to get all of the electricity to charge these cars, anyway?

Unicorn-powered treadmills of course.

suburbanite on March 29, 2011 at 3:52 PM

Electric Boondoggle.

rbj on March 29, 2011 at 3:53 PM

And here’s one last question for the CAF advocates: Just where do you plan to get all of the electricity to charge these cars, anyway?

“What a stupid question, Ed. From the wall outlet” –Global Leftie

Schadenfreude on March 29, 2011 at 3:53 PM

Only twenty more months of government by cartoon characters.

Akzed on March 29, 2011 at 3:56 PM

I’d go buy an Amish-style horse and cart before I would shell out so much as a dime for that idiotic Chevy Volt!

pilamaye on March 29, 2011 at 4:00 PM

Buy a Chevy Volt, and support the coal-mining business!

slickwillie2001 on March 29, 2011 at 4:01 PM

Subsidizing expensive status symbol autos by taxing middle class taxpayers that only the well to do can afford or want. Isn’t that compassion? Or is it noblese oblige? It’s kind of like when rich RINO’s who have a Mexican in their family call us middle class chumps nativists because we don’t want to be ‘obliged’ to pay for their ‘nobility’ of making America a subsidized opportunity for illegals. Wait. OK, I think I’ve figured it out now. It’s compassion and noblese oblige when we middle class dupes subsidize electric fad-mobiles for illegals AND the well to do. That will be nirvanna and utopia all in one.

JimP on March 29, 2011 at 4:01 PM

I bought a new Honda Odessey EXL for less than 33K(actually 29K). I can’t imagine how somebody will buy a Volt for that sort of money.

antisocial on March 29, 2011 at 4:05 PM

“What a stupid question, Ed. From the wall outlet in neighbor’s building” –Global Leftie

Schadenfreude on March 29, 2011 at 3:53 PM

Fixed.

antisocial on March 29, 2011 at 4:07 PM

Listen I’ve seen the Volt and its garbage!

Conservatives we really need to rally around a true conservative champion and get these fools out of power! If we don’t we really won’t have a country after a generation. And I am talking about removing these liberal, big government types on both sides of the aisle! They are destroying this country with their corruption! And yes choosing who wins in what should be an open competition is corruption! It must stop or we are doom to have a world run by the Chinese!

milemarker2020 on March 29, 2011 at 4:09 PM

Are these idiots in Congress and the White House just trying to screw us all, or are they really that stupid and just don’t get it? I’m getting to where I am afraid to turn on the news, for fear of hearing what the clowns in Washington have thought of now.

Susanboo on March 29, 2011 at 4:12 PM

Here’s Obama in one of his electric cars

Kini on March 29, 2011 at 4:13 PM

When do they think the electrical grid is going to be impacted by plug in cars?

Cindy Munford on March 29, 2011 at 4:13 PM

Another stellar idea from the same group that brought us “WTF” “Odyssey Dawn” “high Speed Rail” in the heartland, “Obamacare” “Drill baby Drill” Rio style and the ever popular and successful, “Cash for Clunkers I” the origional.

Koa on March 29, 2011 at 4:14 PM

Good God…what’s wrong with these people?

Dr. ZhivBlago on March 29, 2011 at 4:15 PM

Actually I’ve sat in a new volt and it is pretty well detailed and the fit and finish is great. In fact it would make a great $20,000 car! All the rebate is going to do is make the rich greenies feel good about themselves at our expense. I expect a new country song any day now, “Plug it in, plug it in”.

inspectorudy on March 29, 2011 at 4:17 PM

The Cash for Clunkers authorization is in the Constitution right next to the gun ban clause, above the abortion on demand clause, by the Medicare & Food Stamp section.

Akzed on March 29, 2011 at 3:49 PM

I thought it was next to the “we can start a war with any country we want” clause…

PatriotRider on March 29, 2011 at 3:52 PM

No, it’s behind the “you have to purchase healthcare insurance or else” clause in the Obamacare section.

Susanboo on March 29, 2011 at 4:20 PM

Make the UAW members and the GM bigs buy the stupid things. Hell, slap a auto-deduction on their paychecks…

mojo on March 29, 2011 at 4:20 PM

I’d participate in this….if you’ll sell me an electric car for $8k, tops.

Vyce on March 29, 2011 at 4:20 PM

When do they think the electrical grid is going to be impacted by plug in cars?

Cindy Munford on March 29, 2011 at 4:13 PM

What is this grid thing? There is an endless supply of electricity right there in the wall behind the plug.

Aviator on March 29, 2011 at 4:32 PM

C’mon House!! PULL THE FUNDING! Pick a fight and cut all funds to all global warming garbage!

jeffn21 on March 29, 2011 at 4:33 PM

Just where do you plan to get all of the electricity to charge these cars, anyway?

Isn’t that the REAL purpose of HAARP?

Jesse?

Nick?

/

karl9000 on March 29, 2011 at 4:36 PM

STOP THE EFFING MADNESS!!!

ctmom on March 29, 2011 at 4:37 PM

I saw someone driving a Volt at church Sunday. But, since I live in the Detroit area, I am willing to bet it was a GM employee driving a company car.

It’s just like a couple of years ago when Detroiters witnessed a lot of people driving Chrysler Aspens – all Chrysler employees or spouses of Chrysler employees who received the vehicles at massive discounts or were driving company cars.

bw222 on March 29, 2011 at 4:46 PM

What GE doesn’t wait for its money?

Stephen Macklin on March 29, 2011 at 4:47 PM

Official sales figures from January indicate GM sold 321 Chevy Volts out of total sales of 178,897 cars and trucks sold. That figure is down from the 326 Volts sold in December. All that marketing money, those big subsidies, and they are selling fewer than 100 a week. I wouldn’t worry too much about building new electric generating plants to meet the stupendous demand for electric cars!

osogrande on March 29, 2011 at 4:50 PM

Obams just classified millions of new people as disabled today for ADA. Cloward Piven!

http://tinyurl.com/45dhg7u

PattyJ on March 29, 2011 at 4:55 PM

When they can’t sell this junk even with the bribe, Soetoro will just deem them sold and send taxpayers cash directly to the unions.

Rebar on March 29, 2011 at 4:56 PM

$7500 to anyone who buys a $40,000k golf cart? Talk about tax cuts for the rich. F’n hypocrites.

bitsy on March 29, 2011 at 5:03 PM

Another WTF moment. There are a lot of those these days. What have you done to the adults?

Fuquay Steve on March 29, 2011 at 5:14 PM

The proposed Obama Budget, changes the existing $7,500 electric vehicle tax credit “into a rebate that will be available to all consumers immediately at the point of sale.”

The Volt is not an electric vehicle, it’s a hybrid. But it gets the government subsidy for electric vehicles where the Toyota Prius doesn’t because GM lied about the drive train and then got away with it because of its government connections. At highway speeds the Volt gets around 30MPG, and that’s on premium gas.

Socratease on March 29, 2011 at 5:17 PM

And here’s one last question for the CAF advocates: Just where do you plan to get all of the electricity to charge these cars, anyway?

Pixie dust. Or Brazilian oil. Something like that.

RebeccaH on March 29, 2011 at 5:23 PM

A brand new VW Jetta sells for what 16,000?

Why would anyone pay more than twice that for a smaller car?

Vera on March 29, 2011 at 5:23 PM

You know, I’m getting %&#@ sick and tired of paying for cars that I’m never going to @#*% drive!!!

PackerBronco on March 29, 2011 at 5:29 PM

The Volt is not an electric vehicle, it’s a hybrid. But it gets the government subsidy for electric vehicles where the Toyota Prius doesn’t because GM lied about the drive train and then got away with it because of its government connections. At highway speeds the Volt gets around 30MPG, and that’s on premium gas.

Socratease on March 29, 2011 at 5:17 PM

GM lied, Lithium miners died.

slickwillie2001 on March 29, 2011 at 5:35 PM

Toyota Prius start at $23k, and get about 50 mpg.

Why should I buy a Volt, again?

LarryD on March 29, 2011 at 5:52 PM

Why should I buy a Volt, again?

LarryD on March 29, 2011 at 5:52 PM

For your ʞountry ʞomrade

Kini on March 29, 2011 at 6:00 PM

The Obama administration and their friends on Capitol Hill are floating around a proposal

Tie them all to a raft and float them down the Potomac.

GarandFan on March 29, 2011 at 6:04 PM

The suggest that this time instead of trading in old cars, that we have them trade in old EXTREME politicians.

J_Crater on March 29, 2011 at 6:32 PM

Why aren’t Government Motors executives in Congressional testimony on their fraudulent advertising of the Volt, which resulted in fraudulent subsidies? Could it be because little Bammie is the real CEO of Government Motors?

slickwillie2001 on March 29, 2011 at 6:41 PM

Get ready for … Cash for Clunkers II?

Soooooo……

The Obama administration now admits that the VOLT has been “pre-clunkered”????

Government Motors is pushing a fatally flawed design which renders a new vehicle immediately useless!! And a pile of metal, plastic, and battery acid which performs no useful function is, by definition, a POLLUTANT!!! (Environmentally and Economically)

I can hardly wait for the expose: “Unsalable at any price!!”

landlines on March 29, 2011 at 6:43 PM

The Cash for Clunkers authorization is in the Constitution right next to the gun ban clause, above the abortion on demand clause, by the Medicare & Food Stamp section.

Akzed on March 29, 2011 at 3:49 PM

I thought this was all covered by the I Won Amendment.

BigWyo on March 29, 2011 at 6:43 PM

NOOOOOOOOOOOOOOOOOOOOOOO! I’m sick and tired of helping my stupid neighbors buy a new car. If the damn thing was any good, people would be flocking to the local dealership. Stop spending money we don’t have, you idiots.

Kissmygrits on March 29, 2011 at 6:46 PM

Why not just take the current crop of Volts, paint them all camouflage or sand color and send the lot of them over to our new friends, the Libyan rebels?

Call it the Re-Volt.

coldwarrior on March 29, 2011 at 7:06 PM

wait a minute. I thought power plants were polluters. So how are we saving the environment by plugging our government mandated electric cars into a coal or nuke or oil power plant to recharge? Makes one go hmmmm.?.?.?.

abcurtis on March 30, 2011 at 11:31 AM

wait a minute. I thought power plants were polluters. So how are we saving the environment by plugging our government mandated electric cars into a coal or nuke or oil power plant to recharge? Makes one go hmmmm.?.?.?.

abcurtis on March 30, 2011 at 11:31 AM

Yeah…what abcurtis said!!! Wouldn’t it be simpler if we brought back the “Stanley Steamer”…so that our cars could run DIRECTLY on coal!!!

Envirowackos are funny….especially when they actually try to run things…except that all of us end up paying to dispose of their trash (like the VOLT, windmills, etc).

landlines on March 30, 2011 at 3:54 PM