Report: So, that Chevy Volt still isn’t doing too hot, is it?
posted at 1:21 pm on September 10, 2012 by Erika Johnsen
Dear federal government,
Why do you hate green energy?
Oh, yes — you bet your bottom dollar that I am in earnest. When, time and again, the evidence unfailingly indicates that the federal government meddling in some economic sector only serves to convolute it with bureaucratic inefficiencies and encumber it with non-market signals, why does the government ever think it’s a good idea to be in the business of hand-picking economic winners and losers? Why am I supposed to believe that the profit motive is somehow far more ignoble than the political motive, when in reality, the only way the profit motive is rewarded is when it provides something that people actually want to buy, because it actually works. Political motives can reap benefits through fiat, and encourage businesses, investors, and resources to rent-seek, chasing subsidies and political favor, rather than focusing their energies on producing a viable product.
With that in mind, why do the feds continually feel the need to stick their fingers into everything, most notably of late by fancying themselves green venture capitalists? If there are good technologies out there that can provide consumers with workable alternatives, the market will provide, and coddling infant technologies out of their fledgling stages before they’re ready has only serves to provide us with a bunch of environmentally-and-financially costly wind energy that nobody wants to buy and more Department of Energy-sponsored ailing-or-failing solar panel manufacturers than should have ever been allowed to exist. If they really want renewable energies to succeed, maybe that should consider — oh, I don’t know — just butting the heck out.
Ah, here’s yet another case in point, of which the federal government never seems to tire of offering: Reuters just released essentially a cost vs. benefit rundown of Government Motors’, oops, I mean General Motors’ Chevy Volt sales and operations. …I find myself discouraged:
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce. …
GM’s basic problem is that “the Volt is over-engineered and over-priced,” said Dennis Virag, president of the Michigan-based Automotive Consulting Group. …
Some are put off by the technical challenges of ownership, mainly related to charging the battery. Plug-in hybrids such as the Volt still take hours to fully charge the batteries – a process that can be speeded up a bit with the installation of a $2,000 commercial-grade charger in the garage. …
“I don’t see how General Motors will ever get its money back on that vehicle,” countered Sandy Munro, president of Michigan-based Munro & Associates, which performs detailed tear-down analyses of vehicles and components for global manufacturers and the U.S. government.
It currently costs GM “at least” $75,000 to build the Volt, including development costs, Munro said. That’s nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama’s green energy policy.
The Obama administration, you’ll remember, orchestrated a $50 billion rescue from bankruptcy for GM in 2009, and has dedicated more than $5 billion in subsidies for the sake of green-car development — and let’s not forget the implicit costs of all of those arbitrary emissions standards they’ve been oh-so-magnanimously implementing. And yet, here we are, still providing subsidies to one of the least efficient alternative vehicles out there — and the technical challenges of ownership are so daunting, dealerships are having to practically give them away. If GM can come up with a car that sells itself (their Nissan Leaf, apparently, is doing better than the Volt, and Toyota’s Prius is in its third generation and doing just fine), then great — that’s awesome, more power to ‘em if consumers judge it to be a good substitute to a traditional vehicle. But something about the Chevy Volt is clearly not working, and the Obama administration’s green-energy whimsy is only helping them to keep up the charade.
The federal government’s abilities to stand in the way of free-market competition, a.k.a. innovation and progress, are really quite miraculous.
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They won’t like it! Farmers I mean, and probably not the small farmer but Agri-Business types… I bet they soak us good…
Scrumpy on May 13, 2013 at 9:35 PM
I think I need to go lay down…
News overload, not making sense…
Scrumpy on May 13, 2013 at 9:36 PM
Why don’t you clean your own house so we can trade with you.
We don’t need to be the world’s police or soup kitchen.
tom daschle concerned on May 13, 2013 at 9:37 PM
27 comments or bust!
Bishop on May 13, 2013 at 9:42 PM
And you became the forth..
Crap..
I am the fifth..
Electrongod on May 13, 2013 at 9:46 PM
Long Live Pork !!!!
ExpressoBold on May 13, 2013 at 9:51 PM
Both arguments are correct. And the solution is simply to stop food aid.
pat on May 13, 2013 at 10:02 PM
George Soros is probably waiting to corner the market
J_Crater on May 13, 2013 at 10:03 PM
The rent seeking never stops. That’s ONE thing you can count on, no matter who gets elected.
crosspatch on May 13, 2013 at 10:10 PM
Don’t feed those who hate you in return for the aid.
You only make stronger (literally) enemies.
profitsbeard on May 13, 2013 at 10:22 PM
When the government takes tax money, buys something, and then gives it away; isn’t that a defacto subsidy? It does not matter who they buy from!
All we are talking about here is trasportation costs.
Moose Dung on May 13, 2013 at 10:25 PM
It blows me away when Hot Air falls for Obama’s line of bull, as you are doing again.
Yeah. The current program is twisted, but Obama’s not proposing to end the program just to give him the right to choose how to spend it.
Let’s see, he will give a couple hundred million to hamas, to feed anyone who hates Jews.
He will give another couple hundred million to George Soros, who will say he’s going to feed someone but will in fact pocket most of it and kick back 20% in campaign donations to the same people who brought us Comrade Obama.
Another couple hundred million will go to Hollywood to feed anti-American film makers overseas.
A couple hundred million will buy bullets as part of the soon to be created, “Bullets for IRS Deer Hunters” program.
Oh yes, the final couple hundred million of the measly $1 billion will go to anyone who makes it over the border to go shopping for beer and cigarettes.
After all these years you guys still fall for his line of bull.
doufree on May 13, 2013 at 10:45 PM
I was talking about this a couple days ago, saying that 0bama would change from providing food from the USA to just cutting checks to the imams, warlords and corruptocrats that he likes.
Guess I must be psychic or something.
LegendHasIt on May 13, 2013 at 11:03 PM
So for instance, after an earthquake in Haiti, we wouldn’t bring in food from the US, instead, we’d attempt to source it from the nearby islands. And while we’re negotiating the purchase and delivery of non-US food relief, the quake victims starve. Unless we have established sources/suppliers located worldwide, valuable time will be lost.
But all that aside, I see this as another opportunity for Obama to give our money to other countries. If we’re going to be in the food distribution business, let’s keep those dollars here.
Hill60 on May 13, 2013 at 11:39 PM
Looks like the under on that is winning…
Difficultas_Est_Imperium on May 14, 2013 at 1:19 AM
Well, if we just give them cash instead of actual food, it will save the warlords the trouble of having to steal it and re-sell it, thus also saving them manpower for IED making and reducing their carbon footprint. Flinging gobs of cash at people who hate us is working so well. It really changes their minds and makes them love us–Look at how wisely they use it in Afghanistan! After 10 years, they have nearly 5 miles of pavement laid down now and their children probably get nearly one meal a day!
/SARCASM!!!!
What could possibly go wrong???
Boudica on May 14, 2013 at 4:56 AM
As a counterargument, if the US government takes tax money and spends it in the US, it stimulates the US economy.
If the US government takes tax money and buys the food abroad, that money is removed from the US economy.
I don’t see this as a positive.
It looks like just another way to bleed the US taxpayer dry. Maybe we can feed starving people in other countries more efficiently by giving them the money directly, but why is that the job of the US taxpayer?
talkingpoints on May 14, 2013 at 7:08 AM
It is interesting to me how Erika and Hot Air frames this argument. I know we are all being burned by the ethanol corn lobby in Iowa, an election sensitive state. However, I am old enough to remember when we were really worried about balance of payments. The government was almost to the point that they were considering paying overseas troops in script to save valuable dollars. They even limited foreign exchange for the troops (as if a pack of PX cigarettes could get you the local loose girl). Part of their cure was that we should buy American crops to distribute to the world. Why use American aid dollars to buy food from some foreign country, then give that food to another foreign country.
I know all you city slickers hate the money grubbing American farmer. Cone on folks, this is class warfare BS. Hey! you over there, Erica. Stop talking with your mouth full. Buying foreign aid food with AMERICAN dollars, from AMERICAN farmers, keeps the deficit local and returns some of the benefits to AMERICANS, God forbid!
You also probably don’t know that the US subsidized foreign produce for import. They did this (and still do) under the guise of foreign aid to stop the red menace. How many buy produce from Chile, Mexico, etc.? Of course, many of you are only interested in buying produce from Columbia.
Don’t be stupid enough to confuse this buying AMERICAN with the political and environmental graft of the ethanol lobby.
Old Country Boy on May 14, 2013 at 8:19 AM
I was living on Java at the time of the earthquake/tsunami, and I got to see first hand how this all shakes out.
When food aid comes in, it feeds a family at the expense of the economic destruction of the entire supply and distribution network of food. One of our clients was a fertilizer and seed supplier. His entire stock was destroyed in the tsunami. We gave him a small loan to lay in some stock again.
Then I visited the home of the driver for another western aid agency. He lived in temporary housing put up by habitat for humanity. One room, family of four. Dua anak cukup, you know. Along the wall were stacks of stuff they had received as aid. There were five stoves in boxes, and a pile of 20 kilo rice bags.
I asked my friend how long that rice would last that family and he thought at least a year. Plus, they can make a quick rupiah at the market by selling the rice they got for free at below market prices.
So if you’re a rice farmer, or in farming related business, your demand is trashed for a year, and when you do find a customer your sales price is further cut by the presence of free rice being resold.
Providing aid that doesn’t do permanent damage to the
TexasDan on May 14, 2013 at 8:24 AM
This post seems slanted, I need more info. Based on Erika’s post I should think the farmers, whether agri-business or small family farmers are bad guys for being “subsidized” by the government who only buys food from American sources to give away overseas. I can’t agree with that. First, the only people getting the subsidy are the ones getting the free food. Seems like Erika’s use of the word subsidy is the liberal/leftist version. Any American business that benefits from a government policy is subsidized. Buying from American farms may stabilize the market and be a better use of American taxpayer money but it’s far from a subsidy (just as tax deductions for the oil exploration, buying corporate jets, buying new farm equipment or new commercial fishing boats are not subsidies.). Second, 75 years of American policies benefiting foreign business and handcuffing American business resulted in the destruction of American industrial capability. Do we really want to make farming in America less profitable? Do the same thing to farming that we did to the textile industry? What a great spot we will be in 50 years from now when the left has disarmed us and most of our food as well as energy comes from overseas sources.
peacenprosperity on May 14, 2013 at 9:09 AM
The change sounds helpful, but would there be unintended consequences? Will the US buying local produce drive up prices and just make matters worse?
bartbeast on May 14, 2013 at 9:14 AM
Scrumpy, you are a nit-wit! All food is fungible. The American farmers sells their crops for whatever the market will pay. Those prices are published in many papers and on all agricultural reports.
The government doesn’t buy from the farmer, they buy from the co-ops, agri-businesses, and storage facilities. I think the government gets a good deal because the USDA buys the surplus production. The farmer can’t soak anybody except morons like you at your local food stand.
Don’t talk with your mouth full. Why is it so many hate the farmers. 99% of you wouldn’t last a month on a farm. I know you have gardens and that makes you experts, but you couldn’t feed yourself and family for a year.
Old Country Boy on May 14, 2013 at 9:47 AM
Nice straw man there. Does he keep the crows away?
We are talking about your tax dollars being used to subsidize an industry for billions of dollars. I happen to think sending checks to the locals is a bad idea, but don’t give me this poor farmer stuff. I wish somebody would step in and guarantee my company’s income for the year.
WitchDoctor on May 14, 2013 at 10:32 AM
Boy, do you not understand. But call out your phoney straw man anyway. The government is a consumer here, (add a deserved adhom), you idiot. They are the same kind of consumer as you are when you shop at Walmart or Whole foods. Just as buying F-15 or ammunition for the M-2. No special deals in agriculture, but there may be some for M=2 ammunition.
We also have a law that these cargos of grain must be carried in American flagged ships. That helps our Merchant Marine, or do you want Chins to build their fleet and carry everything.
The way our of your mis-argument is to do away with ALL foreign aid. Don’t send food, don’t send money. That won’t make much of a difference to the farmers. And please, don’t post with your mouth full!
Old Country Boy on May 14, 2013 at 1:07 PM