The Chevrolet Volt is currently out of production due to slow sales. Taxpayer subsidies aren't the answer.
Colorado residents who purchase or lease a new Chevrolet Volt hybrid are now eligible for a state tax credit for ‘plug-in hybrids’ of up to $6,000. This is in addition to a federal tax credit of up to $7,500 for a theoretical total price reduction of as much as $13,500 – all courtesy of taxpayers in these deficit ridden times.
Colorado is only one of a number of states offering a tax credit or subsidy in addition to the controversial federal tax credit, which is subject to owner’s eligibility. As an example of this convoluted government interference in the marketplace, consider that Volt customers who purchase a low-emission model of the 2012 Chevrolet Volt, standard in California since it is needed to qualify for the subsidies, but optional elsewhere since it is not needed for the subsidies – thereby negating some of the “clean air” goal that allegedly is behind these handouts. The Volt has a total driving range of up to 379 miles, based on EPA estimates. For the first 35 miles, the Volt can drive on electric power, after that it is gasoline fueled.
California buyers, courtesy of cash from taxpayers in the fiscally troubled state, will also be eligible to drive solo in the state’s carpool lanes. Critics call this socialism for the rich or at least the affluent – those who can spend $30,000 to $40,000 for a small, four-seat car. The real debate is substantive: how do these government interventions in the marketplace help the stated goal of clean air and energy independence?
The core environmental problem here is actually an economic one. The slow selling $40,000 Volt – even with subsidies – remains overpriced and therefore oversupplied because it is not competitive in the marketplace compared to other 30-40 mpg vehicles. No wonder that the Volt plant in Michigan is currently idled for five weeks because of slow sales. More troubling are sales of the smaller $20,000 Prius c hybrid. In the first three days since the Prius c went on sale this month it sold 1,201 units, bypassing sales of the more expensive – two times the price – Chevrolet Volt and Nissan Leaf for the entire month of February. This trend is certain to continue.
“With the available state and federal tax credits, along with the fuel savings that many owners experience by charging daily, the Volt can fit the lifestyles and budgets of many people,” said Volt Marketing Director Cristi Landy.
Many, thus far, is defined in the thousands. GM had planned to build 60,000 Volts this year even though in 2011 Chevrolet sold 7,671, falling short of its original goal of 10,000. Aside from Volt’s high $40,000 starting price and limited 4-seat interior room, the Volt brand was damaged when it became embroiled in politically motivated Congressional hearings over its safety.
See:
- Focus Electric Approved for $10,000 in Taxpayer Handouts
- Focus Electric Approved for $10,000 in Taxpayer Handouts
- Volt Production Halted. Workers Laid Off for Five Weeks
- Toyota Prius Plug-In Gets California and Federal Subsidies
- Volt Fire Hearings Pits Ideologues versus Engineers
