ReVolt: Obama wants you to pay even more for cars nobody wants

posted at 3:40 pm on March 8, 2012 by Tina Korbe

In a speech before the Daimler Trucks North America manufacturing plant in Charlotte, N.C. today, the president delivered his answer to rising gas prices: He wants to increase the $7,500 tax credit for alternative-energy vehicles to $10,000, earmark $1 billion to reward cities that provide infrastructure for such vehicles, earmark an additional $650 million for a research program to increase the range and decrease the price of the vehicles, and repeal $4 billion of tax incentives for oil and gas companies.

Why? Here is a telltale paragraph from The New York Times:

The credit’s enhanced value would bring the purchase price of alternative-energy vehicles more in line with conventional models, supporters say. Partly because of the vehicles’ costs, sales have been a problem. General Motors announced last week that it was suspending production for five weeks of the Chevrolet Volt, a plug-in hybrid that Mr. Obama has promoted in the past. On Wednesday, he did not mention his goal of having one million electric vehicles on the nation’s roads in 2015.

So, supporters admit that, right now, the benefits of alternative-energy vehicles don’t yet outweigh the costs to consumers. To the producers of such vehicles, I say: Tough luck. The onus is on them to produce a product that consumers actually want to purchase at a price they can afford. Tax credits might give consumers more reason to purchase the vehicles, but it won’t give the producer any incentive to look for cheaper ways to manufacture them. The president’s tax credit ensures that taxpayers will continue to pay an arbitrarily high price for the vehicles long after the market would have brought costs down.

The tax code exists to raise revenue so the federal government can fulfill certain basic, essential functions that individuals or state and local governments cannot (like defend the nation from its enemies!). Tax credits, tax subsidies and tax penalties turn the tax code into an instrument to manipulate behavior instead. That some Republicans favor tax credits for oil and gas companies and that some Democrats favor tax credits for alternative energy companies reveals the problem inherent in the use of the tax code for such behavior manipulation: It leaves it up to politicians in Washington to determine what behavior is desirable. Let the people decide instead.


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Ah yes, the return of the Pinto!

Gordy on March 8, 2012 at 4:44 PM

Ah yes, the return of the Pinto!

Gordy on March 8, 2012 at 4:44 PM

Hey. I drove a Pinto. They weren’t that bad.

sharrukin on March 8, 2012 at 4:46 PM

The VOLT is a $42K Rascal scooter with a 250 watt gas generator supplying power from a little red wagon hooked behind…. only the scooter works better.

joe btfsplk on March 8, 2012 at 4:47 PM

tom daschle concerned on March 8, 2012 at 4:12 PM

Shhh, mustn’t talk about how efficient gas cars can be.

I think the CRX HF had a carburetor tpp.

roy_batty on March 8, 2012 at 4:50 PM

99%’ers hardest hit!

KOOLAID2 on March 8, 2012 at 4:52 PM

Yawn,

So, the man who has spent four trillion in deficit spending in three years decides to up the ante on the Volt to 10K. So predictable…What Obama and his hand-picked car people running GM forgot is that the greens among us only drive foreign cars. They love BMWs, Audis, Volkswagons, Suburu, Toyota, Honda etc…They aren’t going to buy the Volt at any price. They have nothing but disdain for Detroit car-makers…How ironic that these people ended up running GM.

Nozzle on March 8, 2012 at 4:52 PM

Eliminate all tax credits, deductions, allowances, etc. and make the rates at 3%, 5%, and 10%. You’ll see how much money this brings in. BTW, just so you know, I’m a CPA.

rjulio on March 8, 2012 at 4:53 PM

Is it just me… or does Obama’s pronouncements smack of another tyrant, Queen Maria Antonia Josepha Johanna who is reputed to have said when told that the peasants had no bread, “Let them eat brioche.”

As I recall, her popularity, once high, plummeted to low levels. Thus sealing her demise.

CiLH1 on March 8, 2012 at 4:56 PM

Eliminate all tax credits, deductions, allowances, etc. and make the rates at 3%, 5%, and 10%. You’ll see how much money this brings in. BTW, just so you know, I’m a CPA.

rjulio on March 8, 2012 at 4:53 PM

I’m still not paying $40,000 for a vehicle. Even with a tax credit of $10,000, that’s far more than most people are able to pay even with attractive financing.

Call a dud a dud.

Turtle317 on March 8, 2012 at 4:57 PM

Yawn,

So, the man who has spent four trillion in deficit spending in three years decides to up the ante on the Volt to 10K. So predictable…What Obama and his hand-picked car people running GM forgot is that the greens among us only drive foreign cars. They love BMWs, Audis, Volkswagons, Suburu, Toyota, Honda etc…They aren’t going to buy the Volt at any price. They have nothing but disdain for Detroit car-makers…

How ironic that these people ended up running GM.

Nozzle on March 8, 2012 at 4:52 PM

Not really ironic if you think about it. What was one of the first things GM did once they were back on their feet? They fired most of their US engineers ( engineers are not UAW members) and moved their tech center to China and gave away all of GM’s technology to the PRC. It makes perfect sense to me.

JeffVader on March 8, 2012 at 4:58 PM

Not really ironic if you think about it. What was one of the first things GM did once they were back on their feet? They fired most of their US engineers ( engineers are not UAW members) and moved their tech center to China and gave away all of GM’s technology to the PRC. It makes perfect sense to me.

JeffVader on March 8, 2012 at 4:58 PM

Are you serious? Got a link? And yes I’ll google in the meantime :)

tom daschle concerned on March 8, 2012 at 5:00 PM

The three core technologies that China is most interested in acquiring through the subsidy provision are electric motors, complex electronic controls and power storage devices, whether batteries or a fuel cell. At least one of those systems would need to be included in the technology transfer for a vehicle to qualify for the consumer subsidies.


From a NY times article.

Another in a long list of outrages.

tom daschle concerned on March 8, 2012 at 5:03 PM

I’m sure the dealers who “buy” the Volts so they can claim the tax credit and then “resell” them at MSRP to unsuspecting buyers who, as second owners of the car, are not eligible for the tax credit will appreciate it.

Rip Ford on March 8, 2012 at 5:04 PM

Step 1: Drastically increase electricity consumption by switching everyone to electric cars.

Step 2: Drastically decrease electricity supply by shutting down coal-fired electric generation plants.

?? Something here doesn’t add up.

Steven Den Beste on March 8, 2012 at 4:26 PM

Has anyone noticed single electric car pumps (for lack of a better word?) popping up in smaller towns. I live in a small town now, and yesterday I saw the drugstore had installed one of these (paid for by them, strangely enough) I thought, why, who is gonna use this. It really took me by surprise, I have been thinking the popularity of the “big future” of electric cars had been waning since 2010, so why the investment? *Conspiracy thoughts ribboning through my usual left brained level thoughts* :-)

DoubleClutchin on March 8, 2012 at 5:10 PM

Hold on, if tax ‘incentives’ are eliminated for oil companies resulting in prices that better reflect the true cost of oil to the US, isn’t that a good thing?
bayam on March 8, 2012 at 4:01 PM

Define tax incentives. ALL manufacturing companies (including the car companies) get the same 9% deduction to cover manufacturing processes. The Dems have, or are trying to reduce the oil company deduction to 6%. Oil companies do not get any subsidies and they only get the same or less manufacturing deduction as any other company. Explain to me the government subsidy you get to buy gasoline – equivalent to the subsidy to buy a Volt.

If not for this country’s dependence on oil, the US would have spent about a trillion $$ less on wars over the past couple decades. And that doesn’t include the ongoing cost of US military in the Middle East today.
bayam on March 8, 2012 at 4:01 PM

How much oil do we get from Iraq and Afghanistan? Guess what – not much. Oil was never the reason to go into either of those countries. You’re just spouting libtard talking point with no basis in reality. We wouldn’t need to be dependent on foreign oil if the Dems would let us drill into the reserves we have here.

Until Obama has fully erected a communist state, there’s no military cost to patrolling natural gas fields in Texas and Arkansas.
bayam on March 8, 2012 at 4:01 PM

Now why would we even want to have our military patrolling our own oil and gas fields?
“fully erected a communist state” – so you let slip your (libtard/Dems/communists) true plan?

dentarthurdent on March 8, 2012 at 5:23 PM

Another in a long list of outrages.

tom daschle concerned on March 8, 2012 at 5:03 PM

And can you guess where else all of those technology items are very useful? – satellites, aircraft, missiles, ships, tanks…….

dentarthurdent on March 8, 2012 at 5:25 PM

Tina, before parroting the leftist talking point about “Tax credits for oil companies” please take the time to do a little research. The policies the left want to end for oil companies are in place for all manufacturers. As a matter of fact the depretiation schedules for the oil industry are not on par with other industries as it is.

AlexJ on March 8, 2012 at 5:28 PM

And can you guess where else all of those technology items are very useful? – satellites, aircraft, missiles, ships, tanks…….

dentarthurdent on March 8, 2012 at 5:25 PM


Obama is just following BJ’s precedent of giving our tech to the chinese so they can develop advanced weapons to challenge us with.

But don’t ever call those elected democrats anti-american.

tom daschle concerned on March 8, 2012 at 5:39 PM

Hey, why don’t the government just buy them all and issue them to government agencies. Start with the Secret Service POTUS Detail, then go through the FBI, Treasury, and all the other alphabet agencies, including the various environmental agencies. Maybe if they switch from SUVs to these things, the added volume will shift the economics to bring the price down. If not, well at least it will be easier to outrun the government watchdogs when they start to come after us.

MikeA on March 8, 2012 at 5:50 PM

Obummer wants to put another $5 Billion plus into the national debt to get us to buy an over-priced car that only goes 35 miles on electric (on a good day), then needs gasoline to go any further – while shutting down power plants to raise the price and reduce availability of electricity, while doing everything he can to raise the price of gasoline. And after 5 years or so if the car has not gone up in flames, it will need a new battery pack that costs more than the remaining value of the car.

Can some libtard please expain to this poor dumb conservative engineer with a 50 mile per day roundtrip commute across mostl empty prairie how that is a good thing for me?

dentarthurdent on March 8, 2012 at 6:03 PM

MikeA on March 8, 2012 at 5:50 PM

Interesting idea. Let’s see what the police can do with these babies…..

dentarthurdent on March 8, 2012 at 6:13 PM

What a partisan tool you are.

Dave Rywall on March 8, 2012 at 3:48 PM

Have you bought one yet? Or are you all mouth and no action?

Oldnuke on March 8, 2012 at 6:17 PM

I had a Pinto Wagaon back in the day. It’s a miracle I survived !

MCGIRV on March 8, 2012 at 6:21 PM

Obummer wants to put another $5 Billion plus into the national debt to get us to buy an over-priced car that only goes 35 miles on electric (on a good day), then needs gasoline to go any further – while shutting down power plants to raise the price and reduce availability of electricity, while doing everything he can to raise the price of gasoline. And after 5 years or so if the car has not gone up in flames, it will need a new battery pack that costs more than the remaining value of the car.

Can some libtard please expain to this poor dumb conservative engineer with a 50 mile per day roundtrip commute across mostl empty prairie how that is a good thing for me?

dentarthurdent on March 8, 2012 at 6:03 PM

You remember the SNL Church Lady’s superiority dance? If you drive a Volt you can do a little moral superiority dance around your neigborhood every day for your neighbors. What’s that worth?

slickwillie2001 on March 8, 2012 at 6:23 PM

I had a Pinto Wagaon back in the day. It’s a miracle I survived !

MCGIRV on March 8, 2012 at 6:21 PM

My wife’s first car was a Corvair (unsafe at any speed) – and she would like to have it back.

dentarthurdent on March 8, 2012 at 6:24 PM

Hey, why don’t the government just buy them all and issue them to government agencies….

MikeA on March 8, 2012 at 5:50 PM

I’m waiting for him to hit on giving them to welfare recipients. They get free cellphones and a suit of clothes now ‘to help them look for work’, why not a car too?

slickwillie2001 on March 8, 2012 at 6:25 PM

You remember the SNL Church Lady’s superiority dance? If you drive a Volt you can do a little moral superiority dance around your neigborhood every day for your neighbors. What’s that worth?

slickwillie2001 on March 8, 2012 at 6:23 PM

Not enough. I’d probably be doing the dance around the burning heap of “car” halfway to work in the middle of nowhere.

dentarthurdent on March 8, 2012 at 6:26 PM

I’m waiting for him to hit on giving them to welfare recipients. They get free cellphones and a suit of clothes now ‘to help them look for work’, why not a car too?

slickwillie2001 on March 8, 2012 at 6:25 PM

Well – once the big time production line kicks in and makes them dirt cheap (per libtardbayamonomics) – they’ll be able to buy up all the unsold stock and do just that.

dentarthurdent on March 8, 2012 at 6:29 PM

I don’t care if he makes them “free” (at taxpayers expense), I wouldn’t take one.

I proudly ride around in my F-150 Raptor with a 6.2L engine, and yes, when I’m racing around my property I floor that sucker over the hills to the point of becoming airborne.

I don’t buy this bullcrap from the pols about “the president has little or no control over gas prices” when half of what we pay for a gallon of gas is TAX.

STOP SPENDING AND TAXES LIKE THIS CAN GO DOWN.

What part of that is so hard to understand…to people with brains that is.

Wolfmoon on March 8, 2012 at 6:52 PM

Socialist fool.

netster007x on March 8, 2012 at 6:52 PM

A year or so ago I was in slow traffic on the freeway, and a Volt with “manufacturer” plates was sitting on the shoulder with a guy talking on his phone, likely to get a tow. I had an orange extension cord in my car at the time, and I wanted soooo badly to pull off run the cord to the car, and snap a photo with my phone.

moo on March 8, 2012 at 7:00 PM

The Current Resistance to the Volt has resulted in a total lack of Power in the market. Rs/Volt = Zero.

stormridercx4 on March 8, 2012 at 7:11 PM

I remember driving a datsun b210.

When you were entering the freeway, you would
Have the pedal to the floor.

newportmike on March 8, 2012 at 7:12 PM

I never want to hear another liberal yammer on about “corporatism”.

Murf76 on March 8, 2012 at 7:15 PM

Electric cars still have a fuel tank, they just call it a battery… They still run on coal, oil, nuke… oh and wind, solar and Bull Droppings too…
-

RalphyBoy on March 8, 2012 at 7:28 PM

Maybe Barry can get all his Hollyweed friends to start buying Volts.

GarandFan on March 8, 2012 at 7:45 PM

I never want to hear another liberal yammer on about “corporatism”.

Murf76 on March 8, 2012 at 7:15 PM

I thought “corporate welfare” were bad words.

CW on March 8, 2012 at 7:48 PM

Somehow, I just do not think that Hollywood will be making a sequel to “Who Killed The Electric Car?”

mediamime on March 8, 2012 at 9:07 PM

Not really ironic if you think about it. What was one of the first things GM did once they were back on their feet? They fired most of their US engineers ( engineers are not UAW members) and moved their tech center to China and gave away all of GM’s technology to the PRC. It makes perfect sense to me.

JeffVader on March 8, 2012 at 4:58 PM

Geez does it disappoint me when folks on my side of the political isle repeat stuff that’s simply not true. I’ve seen so much nonsense about the Chevy Volt and the car industry from my fellow right wingers that it makes me want to pull my hair out.

What you said about GM getting rid of their US engineers is complete and utter BS. I live in the Detroit area and I can assure you that if GM had fired “most of their US engineers” it would have been huge news around here. I also edit an automotive website and contribute to two others. I’ve seen nothing like this reported anywhere and I think the engineers that I know who work at GM would have told me if they’d been fired. If anything GM’s been hiring engineers in the US, as have most of the companies in the US automotive sector, for the last year or so. They cut to the bone and beyond while they were going through the bankruptcies and they needed more engineering manpower going forward. Last year at the Society of Automotive Engineers World Congress at Cobo Hall in Detroit, there was literally a hiring frenzy going on.

The GM Tech Center in Warren still has thousands of engineers and technicians going to work every day. If anything, there are more engineers working there now than two years ago. Does GM do design and R&D work in Russelheim, Germany, at their UK design studio, at GM’s Holden subsidiary in Australia, in Seoul, Korea and in Shanghai? Of course they do, it’s a global company, but the Tech Center in Warren is the hub of all of that activity. For example, the current Camaro and 9C1 Police Package Caprice are based on rear wheel drive platforms originally developed in Australia. The new Chevy Sonic is based on a Korean platform. None of this is a secret.

Do you think that the Corvette ZR-1 and the Cadillac CTS-V weren’t designed and developed in Warren, Michigan at the General Motors Tech Center (well, with a few trips to the Nurburgring in Germany for testing)?

As for giving away “all of GM’s technology to the PRC”, apparently there was some pressure by the Chinese on GM to share EV tech with their Chinese partners. Subsequently when GM announced they were working on an EV with SAIC, their Chinese partner, GM insisted that they weren’t sharing any of the Volt’s tech with SAIC. I spent some time trying to find any reliable source that says otherwise, and I can’t.

GM has a huge amount of proprietary technology well beyond the Volt. There is no way that all of that IP was given to the Chinese. GM, like all companies, if pretty sensitive about intellectual property theft in China. After all, Chery copied one of their cars and GM lost in the Chinese courts.

Ronnie Schreiber
http://www.carsindepth.com

rokemronnie on March 8, 2012 at 9:45 PM

Ah yes, the return of the Pinto!

Gordy on March 8, 2012 at 4:44 PM

To begin with, the Pinto fire story is not what you think it is. More to the point, the Volt is no fire hazard. One, 1, uno, a single Volt at a NHTSA facility that had been crash tested into a pole and then rolled over, started to burn about 3 weeks later because the battery pack had been damaged and the battery coolant leaked out causing a short circuit. It really was a quirk because there’s a structural beam in the Volt’s floor that happened to directly line up with where the pole hit the car. That beam transferred most of the energy of the collision directly into the battery pack. GM’s now retrofitting the battery packs with more robust shielding. That’s the entire story. One fire. The Volt has been crash tested hundreds of times and enough Volts are on the road that some have been in some serious real world accidents. No other fires.

Now compare that to the 12 Mini Coopers in customers’ hands, not in a gov’t test facility, that have burned, 8 of them while parked, because of an electrical malfunction. That’s the subject of a recent recall.

In another recall, of Ford Escapes and Mazda Tributes, there were 86 reported fires, also a number of them while parked, that ignited after the cars had already been recalled once. Apparently a lot of the dealer techs were not doing the recall service right.

Car fires are a fact of life. There are hundreds of thousands of car fires every year in the US, with about one person a day dying from a vehicle fire.

So saying that the Volt is some kind of fire hazard is just plain wrong.

I don’t think that the Volt makes sense financially if you’re looking to save money. I’m also not a a fan of the $7,500 tax credit, which Obama wants to bump up to $10,000 and change it to a cash rebate. However, the Volt is a very cool car. The owners love them and if you read the serious reviews, even sites like The Truth About Cars, which has a reputation as being very skeptical of car companies in general and GM in particular, have given the Volt positive reviews. It’s quite an impressive bit of engineering.

rokemronnie on March 8, 2012 at 9:57 PM

Lithium batteries are a reasonably stable explosive.

Given the tens of millions of gasoline powered cars and mire thousands of electric cars comparing the numbers of fires is not statistically valid. besides the volt has both which means that any honest way you look at it the Volt is more dangerous.

Slowburn on March 9, 2012 at 2:50 AM

If the Volt is so great, why does it have a gas engine for just in case?

Kissmygrits on March 9, 2012 at 9:00 AM

If the Volt is so great, why does it have a gas engine for just in case?

Kissmygrits on March 9, 2012 at 9:00 AM

Think of it like a diesel-electric locomotive with rubber tires and a steering wheel. The internal combustion engine’s not there to provide direct motive force to the wheels. It’s just a generator to recharge the battery; the drivetrain is electric. The gas engine is there for “extended range.”

I think the idea is cool, don’t get me wrong, but there are much more economical solutions that have already been worked out for the needs of most people. I doubt seriously that the Volt can compete with the $19,000 price point of an Insight no matter how many of them Chevy can make. You’re talking about cutting unit cost by more than half on a highly sophisticated manufacturing process.

I say all this as a Honda hybrid owner who’s bought a half-dozen GM cars in his life. I don’t want to see GM fail, I’m just scratching my head over this one. Maybe they should have introduced it as the Cadillac Current first?

DrSteve on March 9, 2012 at 9:25 AM

The gas engine is there for “extended range.”

DrSteve on March 9, 2012 at 9:25 AM

That right there is the major point – extended range means beyond 35 miles – that’s just not usable range for a lot of people – in fact that 35 mile range (on a good day) gets me to work and then halfway home for one day. And that range doesn’t count using headlights, windshield wipers, heater/defroster, and maybe even a radio. So in the winter and bad weather that gas engine is running all the time.
And as I said earlier – Obummer’s other policies and actions are driving up the cost of both elecricity and gasoline, so you’re screwed both ways with this car.

dentarthurdent on March 9, 2012 at 1:35 PM

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