It's only lunacy to the uninitiated.In a March 30 speech in Washington, Mr. Obama announced his mandate that 100% of the federal vehicle fleet be “advanced technology” vehicles by 2015. This means that every vehicle in the federal fleet — some 600,000 currently — will have to be a hybrid or electric vehicle. In an extraordinary coincidence of the kind so common during the Age of Obama, General Electric — headed by Jeffrey Immelt, the chief of the president’s Council on Jobs and Competitiveness — will contribute to the brave new “advanced technology” future by buying at least 12,000 Chevy Volts.
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I’ve been following the dim fortunes of the Chevy Volt for some time (here, here, here, here, and here). The Volt is an electric pseudo-hybrid compact with a $41,000 manufacturer’s suggested retail price (MSRP) — currently selling for as much as $65,000. To “incentivize” the Volt, the Obama administration is providing a $7,500 tax rebate for each sale, a tax rebate it is planning to turn into a direct, point-of-sale rebate in the near future. After all, cash for clunkers was so economically stimulating, this gesture should make Volt sales explode. (Considering the tendency of lithium-ion batteries to do, more or less, just that, this may not be the most encouraging analogy.)
The Volt’s abysmal all-electric range is supplemented by a weak gasoline engine that requires premium fuel. Charging requires up to 12 hours, but may be halved for an additional $2,000 (installation costs not included) for a special 220V home “fast charger.” Depending on the kind and quality of home wiring, installation costs may be daunting. The charger draws so many amps that considerable rewiring may be required, and proud Volt owners may not be able to use any other high-amp appliances (vacuum cleaners, microwave ovens) while their Volt is charging. Remember that the Volt’s only potential claim to real-world practicality — apart from green street cred — is its high-tech electric drive system which promises unlimited gasoline-free miles. Consider that there is no actual charging infrastructure out there in the real world — not that this will matter in parts of the country that experience actual winter. Cold has the unfortunate effect of rapidly draining and even disabling batteries.
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Volt sales volume is abysmal, and while GM won’t admit it, even at $41,000 MSRP it is almost certainly losing money on every car. In a genuinely free market, this should not be surprising. After all, for something between $33,500 and $57,500 (that’s minus the $7500 tax rebate), plus more than $2,000 for a charger (installation not included), anyone can be the proud owner of a car that will likely get no better mileage than many conventional vehicles which cost tens of thousands of dollars less. Who could resist that siren song? As it turns out, just about everyone.
Who do you suppose is supplying the chargers? Why, that would be GE. What a coinky-dink!
Let's recap: artificially-created market? Check.
Crony-"capitalism" on two fronts, GM and GE? Check, check.
What's not to like; it's a win/win for .... well, not quite everybody. The taxpayer will be footing the car-bill in inflated prices for Volts for aaaaaallll those gummint employees, not to mention to GE for the chargers and to whatever power company is still allowed to provide electricity (including whatever % from "green" technology per mandate).
Then, because ... well, gee whiz, I don't know, another coinky-dink of timing, we are witness to
this, courtesy of bonz:
"Obama to Sell GM Stock at Huge Loss to Taxpayers"; huge in the amount of $11 Billion. A billion here, a billion there; pretty soon it starts to add up to real money, dunnit?
Government officials are willing to take the loss because the Obama administration would like to sever its last ties to the auto maker, the people familiar with the matter said. A summer sale makes it more likely Treasury could sell all of its stake in GM by year's end, avoiding a potentially controversial sale in the 2012 presidential election year. [Italics added]
We are still on the hook for repaying that $11 Billion, plus the interest.
But Paul Ryan and the Republicans are looking to "balance the budget and cut the deficit on the backs of the poor".