Electric cars

Congratulations Taxpayers, Chevy Volt is the Most Government-Supported Car at Up To $250k in Subsidies Per Vehicle Sold


If you've been revolted by the fact that every $40,000 electric Chevy Volt sold by Government Motors enjoys a $7,500 rebate at the expense of taxpayers, then better have some Dramamine before you read any further. James Hohman of the Mackinac Center for Public Policy has calculated that the total subsidies—direct and indirect, federal and state—poured into this white elephant could add up to $3 billion or $250,000 for every Volt sold to date. And this is not counting the 26 percent ownership that Uncle Sam still has in the company.

Explains the Michigan Capitol Confidential, a Mackinac publication:

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.

It's unlikely that all the companies involved in Volt production will ever receive all the $3 billion in incentives, Hohman said, because many of them are linked to meeting various employment and other milestones. But the analysis looks at the total value that has been offered to the Volt in different aspects of production – from the assembly line to the dealerships to the battery manufacturers. Some tax credits and subsidies are offered for periods up to 20 years, though most have a much shorter time frame.

GM has estimated they've sold 6,000 Volts so far. That would mean each of the 6,000 Volts sold would be subsidized between $50,000 and $250,000, depending on how many government subsidy milestones are realized.

If battery manufacturers awarded incentives to produce batteries the Volt may use are included in the analysis, the potential government subsidy per Volt increases to $256,824. For example, A123 Systems has received extensive state and federal support, and bid to be a supplier to the Volt, but the deal instead went to Compact Power. The $256,824 figure includes adding up the subsidies to both companies.

Of course, the subsidy per vehicle will decrease as more Volts are sold. But if you think that taxpayers will ever recover their full "investment," then I have some stock in the Trabant that I want to sell you.

NEXT: The Year in Government Waste: Bridges to Nowhere, Pancakes for Yuppies, Sesame Street for Pakistan

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  1. This can’t be true. Liberals are so much more coherent than conservatives. Rachel Madow says so.


  2. Jesus fucking christ! (NSFW)

    All that money diverted from productive investments!

    For the cost of 5 of those things, I could have started up a successful turnip twaddling factory! Employing lots of transgendered, disabled, single mothers!

    The humanity!

  3. Yup. Even at nominally $32000, the volt is overpriced for its market segment. GM would have been better off leaving it in the vaporware phase.

    1. But environmentalism is a religion to lefties. It doesn’t matter what the numbers say. You will never convince them that this was a dumb idea. They would agree to sticking people in ovens if they were convinced it was the “green” thing to do.

      1. I believe that the enviro-lefties wouldn’t agree to sticking people in ovens. Too high of a carbon footprint.

        Composting. THAT I believe they’d do.

        1. No no no. You put the people in ovens in a reduction environment. That turns them into biochar which is then buried for carbon sequestration.

      2. Lefties aren’t the only ones who dump critical thinking when something they want to believe is stated, as evidenced by the blind acceptance of Dalmia’s misrepresentations in this comment thread.

  4. If you’ve been revolted by the fact that every $40,000 electric Chevy Volt sold by Government Motors enjoys a $7,500 rebate at the expense of taxpayers

    I’m so ashamed of you, Shikha. A pun?

  5. As if I didn’t hate this abortion of a car enough already.

    Now I really don’t feel bad about flipping off the drivers of Volts.

    1. Now I really don’t feel bad about flipping off the drivers of Volts.

      You’ve actually seen one on the road?

      1. The only Volts I’ve seen are the one’s driven around by dealership guys. Always with the dealers name on the side.

        I’m thinking those probably count towards the purchase numbers, right?

  6. That sure is a hell of a lot of money for a giant battery that might explode on you if it gets jostled a little too hard.

    1. Gasoline powered cars never catch on fire, of course.

      1. apparently really only if they’re high in sportscars (see ferrari, lamborghini)

        1. Actually, Ferrari uses “hot” engines. Look at the spark plug numbers. That’s things like oil leaks can lead to fires.

      2. About once a day in Houston, from my recollection.

  7. I’d love for electric cars to be a reality and power them with nuclear energy. Fusion while I’m at it. But doesn’t the government realize that as soon as a practical electric car is available it will sell no subsides required. I think I just answered my own question.
    Government; worst. venture capitalist. ever.

  8. btw – I’ve seen two Volts here in Michigan. One was in a parade, while the other was tooling down the highway.

    At that price level, you could buy a nice mid-level car or SUV, and have enough gas for the life of the car. I know, I know – the average buyer of this is more concerned about ‘being green’ than saving money.

    1. I’m yet to see one, and I travel OTR pretty often.

    2. At that price level, you could buy a nice mid-level car or SUV, and have enough gas for the life of the car.

      Please show your work for that statement. Unless you’re assuming an incredibly brief lifetime, no way that’s true.

      1. Read the story, read the comment.

        If LH is referring to the number of the $250,000 subsidy cost it would not be difficult to justify that statement. At all.

        Even if you stated that a small SUV was 32k vs the 42k Volt sticker price you are talking a 10k difference to spend on gas. $4 gallon = 2500 gallons of gas x a modest 15mpg = 37,500 miles of free gas. That’s 3+ years of average driving right there.

        Factor in the cost of operating the Volt (it is not free to operate that) vs the small SUV I bet you could easily get 5 full years of free fuel cost with the SUV vs the Volt.

        1. I just looked up a Toyota 4Runner.

          Not exactly a ‘small SUV’.

          From Edmunds.com …. 30k *suggested* sticker. 17/23 City/Hwy.

          So with the revised numbers we have 12k difference;$4 a gallon gas yielding 3000 gallons of fuel x an average of 20mpg = 60,000 miles of free fuel.

          Based on those numbers 5+ years of free fuel for a *good* sized SUV is easily obtainable.

          1. Hopefully for the 4Runner, 5 years ain’t the life of the car.

            If you want to make a true statement, make the statement. Not an embellished form you’ll move the goalposts on later.

        2. The commenter was clearly talking about the cost comparison from a buyer’s perspective. The buyer isn’t paying $250K (neither are the taxpayers, but we’ll ignore Dalmia’s slight of hand for the moment).

  9. And this is not counting the 26 percent ownership that Uncle Sam still has in the company.

    Just for the record, when we sell that 26% ownership?

    The money we lose won’t be lost the day we sell–it was already lost the day Obama bought it.

    If you buy a stock for $10 a share, and it goes down to $5 a share–and you subsequently sell it? You didn’t lose your money the day you sold the stock for $5 a share. You lost your money the day you bought it for $10 a share.

    The misconception that you lose money on bad investments the day you sell them at a loss is why the government still owns GM stock today. Because Obama doesn’t want to have his opponent say that he lost all that money–after a sale. But the truth is that Obama lost that money the day he overpaid for it. Not the day he sold it at the market price.

    The sooner we get our heads wrapped around that fact, the sooner we’ll be out of the automobile business.

    Well, out of direct ownership anyway. When we’ll stop subsidizing the industry is anybody’s guess.

  10. It gets better: Due to batteries that catch fire, GM has promised that it will buy back any Volts that customers want to return. They say they promise this in order to boost confidence in their product, but I think its more complex than that. Also, this gives buyers of the Volt an easy-out if they change their mind. I don’t expect this to boost sales of the vehicle.

    1. Any car can explode, hurr hurr durr. Don’t you watch the movies?

  11. But if we cut government funding and spending by just 1 penny there will be old people in the streets eating cat food!

  12. So what I’m being told by this article is that, even with a ridiculous $40k price tag on each of these volts, and even if the subsidies for each vehicle are on the low end of the possibility scale ($50k-$200k), taxpayers are STILL paying for for the car than those who actually buy and use it?

    Fuck you, Obama. Fuck. You.

    1. I would take any Shikha Dalmia article with a grain of salt if I were you. She’s notorious for fuzzy math and sneaky redefinitions of terms.

      Immediately obvious problems with this study are:

      1. including development costs in the marginal cost per vehicle;

      2. give ridiculously wide range for subsidies, quote only the high figure;

      3. assume that the subsidies for parts mfrs etc are entirely devoted to their Volt parts production, rather than production for other vehicles as well.

      And that’s before I RTFA. I’m sure there’s other methodological gremlins lurking in the study.

      1. Are you actually trying to convince people that the Volt is not subsidized at hitherto unheard of levels, and that it is not a “green” at any cost bust?

  13. That’s some multiplier!

  14. Tesla Model S announced today at $50k (post subsidy) for preorders.

    Yeah I’d definitely rather have a Volt than an electric car from a company which has put thousands into production already.

  15. When did this ridiculous thing first go into development? About a decade ago if you count the EV1? This is like witnessing G’n’R receive bushels of taxpayer funded stimulus to complete Chinese Democracy.

    1. You should check out Who Killed The Electric Car.

  16. Of course, the subsidy per vehicle will decrease as more Volts are sold.

    Of course, this means your headline is completely misleading, even before we get to the infamous “up to” abuse.

    1. Shit, just read the byline and I guess Dalmia’s back. My misrepresentation filters have atrophied somewhat in her absence.

    2. I guess that statement is dependent upon whether or not any additional significant numbers of Volts are sold in the future.

      And I am not talking about Government fleet use. I am talking about a Consumer making a choice with their own hard earned cash.

      Seriously, we can play ‘what-if’ all night long. Conceivably every one of the Volts could burst into flames at anytime.

      We have to look at the article and draw conclusion as the facts are now. Not as some people would like them to be down the road.

      1. So you’re damning every technology that costs money to develop, since its cost per unit produced are going to be astronomical at first. Like Dalmia and those fools at the auto research group damned the Prius in 2006 because its energy costs per unit produced were high back then. Five years later? They look like idiots.

        Well, they looked like idiots then too, but now we have confirmation in black and white.

        1. It’s a little different when the tax payer is footing the R&D bill… No? GM doesn’t have to worry about it panning out or not.

  17. Shikha Dalmia Hall of Fame:

    Have You Hugged a Hummer Today? Hybrid vehicles’ overall energy costs exceed those of comparable non-hybrids

    Debunked by humble non-think-tank employees in the comment thread, yet still on the Reason Foundation website for some reason.

  18. From the 2006 Hummer vs. Prius article:

    As for Hummers, Spinella explains, the life of these cars averaged across various models is over 300,000 miles. By contrast, Prius’ life ? according to Toyota’s own numbers ? is 100,000 miles.

    Toyota’s own numbers? Where? Let me look at the PDF of the study. Ohhhhh….

    The 100,000 mile life expectancy for Prius is time as well as distance sensitive. The historical data shows early Prius models were driven an average of only 6,700 miles per year (rounded). At that rate, the vehicle would require 15 years to reach 100,000 miles. It was our determination that is highly unlikely the ’05 or ’06 Prius models would still be in active service let alone serviceable 15 years from today.
    The reason for this is twofold: First, the first and second generation Prius hybrid technologies are rapidly being replaced by lighter, more efficient systems for the new and upcoming Prius versions.

    Not quite Toyota’s own numbers there, and quite a few dubious assumptions. Like Dalmia, they shove an acknowledgement of being full of shit at the end:

    Can the Prius be driven more than 100,000 miles? Of course. The vehicle is superbly engineered. But this assumes the average Prius driver begins using the car more often. If the Prius were driven the American average of 13,000 miles per year, it would hit the 100,000 mile mark in 7.6 years, well within its attractive (financially and technologically) useful life span. In 10 years, again about the maximum for ground-breaking technology, it would have registered 130,000 miles. Mechanically, there is no logical reason for the Prius not to last 130,000 miles or more.

    The 300000 mile figure for the Hummer sounds like bullshit to me too, but I’m busy with other things and won’t bother digging through the mess of ambiguous links at the site of the people who did the research.

    And really, Ms Dalmia, you do need to come up with some new rhetorical tricks. From the 2006 article:

    But the biggest reason why a Hummer’s energy use is so low is that it shares many components with other vehicles and therefore its design and development energy costs are spread across many cars.

    Again, including development and design costs in marginal costs! Has she learned? No. I’m not sure that she cares, as apparently her employer doesn’t.

  19. Makes you wonder why they don’t just subsidize it a mere $35k more per unit and just give them away free.

    1. Speaking for myself I would not take one for free.

  20. Maybe valid numbers? But still, how much in “tax breaks”, rebates, crony capitalism, mutual masterbation, etc went into standard autos/oil/internal combustion? Neither is worth it nor does it make one better\worse… Remove all subsidies and let the market decide the price.

  21. So, let me get this straight. According to this article I can buy a $250,000 car, that gets well in excess of 100mpg, and all I have to pay is $32.5k out of pocket? Or, I can buy, eg, a BMW 3 series that costs around $25k to build and pay almost $40k for it, get 23 mpg, and pay additional $15k in fuel costs to overseas oil interests.

    This is an intelligence test, right? Pick one: you can buy a $250k car for $33k or a $25k car for $40k plus an additional $15k in operating expenses. (Hmm… I don’t know, that’s a pretty close call.)

    Whether you like the program or not, the money has been spent. So at this point I guess you’d have to be crazy not to run out and buy a Volt or two. When George W. Bush put this program in place he was really looking out for future Volt owners I guess…

    Of course, if the Voltec platform sells like the Prius – and there is every reason to believe it will – then the cost to the taxpayers will be a few hundred dollars. But for now, the savvy consumer snags the awesome deal. At least who is not blinded by anger at the Bush administration for putting this program in place.

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