“Don’t wanna lose it, it’s electric! (Boogie Woogie Woogie)” Those lyrics (from Marcia Griffiths’ song “Electric Boogie,” better known as “the Electric Slide song”) are quite indicative of the Obama Administration’s position on the electric car. No matter how much the market and consumers reject the electric car, the government will continue to push forward with subsidies to produce and purchase the vehicle. Charles Lane wrote about the electric car in Saturday’s Washington Post:
[The ad campaign] asks consumers to make an economic and technological leap of faith—just as both GM and the firm’s biggest backer, the Obama administration, have invested, financially, politically and psychologically, in plug-in hybrids and other electric vehicles. How else to explain the fact that both Washington and Detroit persist in their costly electric-car project despite mounting evidence that the vehicles serve no particular purpose, environmental or economic?
Lane points to a study from J. D. Power and Associates that says there will be very little demand for electric vehicles over the next decade, even with lucrative federal handouts. If coal produces the electricity that powers the electric vehicle while it runs, the reduction in greenhouse gases is negligible. Other environmental headaches include how to depose of exhausted batteries. The lack of charging infrastructure presents another problem.
Even so, just how much are electric vehicles running on actual electric? The Chevy Volt, touted as the electric vehicle that could revolutionize the auto industry, isn’t all that electric. Investor’s Business Daily covered this last week:
Advertised as an all-electric car that could drive 50 miles on its lithium battery, GM addressed concerns about where you plug the thing in en route to grandma’s house by adding a small gasoline engine to help maintain the charge on the battery as it starts to run down. It was still an electric car, we were told, and not a hybrid on steroids.
That’s not quite true. The gasoline engine has been found to be more than a range-extender for the battery. Volt engineers are now admitting that when the vehicle’s lithium-ion battery pack runs down and at speeds near or above 70 mph, the Volt’s gasoline engine will directly drive the front wheels along with the electric motors. That’s not charging the battery—that’s driving the car.
Fine print on the Volt ad promises just “25–50 miles of electric driving in moderate conditions.” Translation: Much of the time the car will be running on gas, just like ones that cost far, far less than the four-seat Volt’s price of $33,500 (after a $7,500 federal tax credit).
The story is similar across the pond. British consumers bought a grand total of 55 electric cars last year out of over 2 million vehicles sold. And similar to our government, the cash-strapped U.K. government will provide a ?5,000 subsidy toward each electric car purchased next year.
The elite receive tax breaks they don’t need. The automakers receive subsidies to produce something no one wants to buy. But it makes environmentalists happy and it throws a bone to a struggling automaker working to turn sales around. It’s Bruce Yandle’s bootleggers and Baptists theory. GM is doing better, but it’s not because of electric vehicle production or the government bailout but rather how bankruptcy forced the automaker to restructure. Making a product no one wants to buy is how GM got into this mess, and now the government’s doing its job to ensure it will happen again.
Lane sums it up nicely:
The Obama administration’s commitment of $5 billion in loans and grants for electric cars is the biggest taxpayer rip-off since corn-based ethanol. It benefits no one but a few well-to-do car buyers and politically connected companies. Any “green” jobs these rent-seeking firms create will vanish when consumers reject their products and/or the subsidies cease.