Human Events Blog

The Volt Re-Evaluated: $250,000 Per Car

I’ve long been fascinated by the sad tale of the Chevy Volt, a heavily subsidized electric car nobody wants.  It’s one of the purest, most perfect examples of government attempting to artificially create a marketplace, and failing miserably.

At the time of the Volt’s launch, when rebates brought the consumer price down to $33,500 (which is still horribly high for such a tiny, unappealing car, and doesn’t factor in the enormous maintenance costs of the electrical system) I decided to total up all the subsidies pumped into the vehicle’s creation, divide them by projected sales, and came up with a per-unit real cost of $81,000

Very few Volt buyers had any awareness of the vehicle’s true cost, because other people paid the difference between the $33,500 they were plunking down and the $81,000 true cost.  That’s an appalling corruption of the vital financial information stream.  Cost is data.  Nobody knows what anything really costs anymore, due to the vast machinery of subsidies and penalties thumping and groaning away just out of our view, but the Volt was an especially egregious example.

A year and a half later, after a few Volts burst into flames, James Hohman of the Mackinac Center for Public Policy did an exhaustive evaluation of the Volt’s current true cost.  He included state and federal assistance spread over “18 government deals that included loans, rebates, grants, and tax credits.”  This was measured against the roughly 6,000 Volts sold to date.

The result of Hohman’s calculations, as reported by Michigan Capitol Confidential, is that “each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it.”  That’s a worst-case scenario, as some of the companies involved in producing Volt components might not meet the targets necessary to receive the subsidies.  On the other hand, Hohman did not include the massive taxpayer bailout that made it possible for Government Motors to exist and push out those unloved little electric firecrackers, or the incentives paid to companies that lost bids to provide Volt batteries.

The Michigan Capitol Confidential article garnered a laughably weak response from GM:

Greg Martin, director of Policy and Washington Communications for GM, wrote in an email, “While much less than the hundreds of billions of dollars that Japanese and Korean auto and battery manufacturers have received over the years, the investments provided by several different Administrations and Congresses to jump-start the country’s fledgling battery technology and domestic electric vehicle industries (not just specifically for the Volt as Ford’s offering will also use LG Chem batteries and Fisker will use the A123 system for example) matches the same foresight and innovation  leadership that other countries are exhibiting and which America has historically taken pride in.” 

Martin added that the Mackinac Center’s math was “simple and selective.” However, he offered no data or specifics to support his assertion.

Once again, compulsive force is used to “transform” the economy – “jump starting the country’s fledgling battery technology and domestic electric vehicle industries” as Martin put it – and the result is an unmitigated disaster.  The only way to finish the job and force customers to buy Volts, as General Motors CEO Dan Akerson openly speculated last year, would be to artificially jack up the price of gasoline until “green” cars become reasonable alternatives.  Akerson had an extra $1 per gallon of extra federal gas taxes in mind at the time, although I’m not sure that would be enough anymore.  Maybe $2 or $3 per gallon would do it.  That would also give the government more cash to spend on its wise Solyndra-style industrial policies.

Well, at least the $3 billion in taxpayer subsidies we’ve been forced to pump into the Volt are putting sustainable cars in the hands of the poor, right?  Er… not really, no.  Here’s what Akerson said about Volt buyers in an interview he gave last week:

Q: Are you moving past the early technology adopters on the Volt at this point, or has any data surprised you on who is actually buying this vehicle?

A: The average purchaser of a Volt is earning $170,000 a year. About a third of the customers haven’t been in a Chevy store in more than five years and half have never been in there. They aren’t just early adopters.

Some of them – I think roughly half – are either Prius or BMW owners. So one, you could say Prius owners were probably early adopters in the olden days, but that’s kind of passed through. But BMW people want styling, good design, and an innovative powertrain, or power source, and I think Volt is a game changer.

So all that money pulled out of your middle-class wallet has been subsidizing the boutique car purchases of people who make $170,000 a year, and might otherwise be looking at a BMW!  Wonderful!  Behold the magic of government subsidies.

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  • Martin Hale

    In keeping with the season:

    Chestnuts roasting on a flaming Volt
    Chemicals burning in your nose
    Sirens blaring from fire trucks galore
    And folks dressed up in hazmat suits…

  • DaneChile

    This is what happens when government sticks its fingers into the free-market stew.

  • Guest

    I can have a new Mustang GT for everyday of the week and have enough left over to pay the insurance and gas.

  • Steelchaser001

    Look at the bright side. Given the plant that produces this marvel sits partially on the border of Detroit, when the vehicle is cancelled another of the few remaining employers will be closing. Oh wait, I’m sure another subsidy to Gov Mot will place the next dream car there.

  • sigp238

    C’mon man, this is chump change when you figure in saving the planet. We have to keep the unions employed and be green. Suck it up this is a small price to pay.

  • http://twitter.com/Doc_0 John Hayward

    Bravo!

  • jeturcotte

    It’s also dramatically inaccurate; Aside from the cost of replacing battery cells, maintenance on electrics is less frequent, less complicated, and less costly than on ICE engines.  I’m not sure if I’d be more horrified by the idea that the author believes what he says, or was simply paid to do it.  Still, since I want one, I guess that lumps in with this ‘nobody’ crowd I see driving them around in the D.C. Metro area.

  • globalcrap

    The only people that can afford these obogus cars,are the people that work in this O Bogus government.

  • Concerned4America

    One of the nice things about natural gas is that most existing engines can be converted to burn it. It is even easier with the older cars.

  • JayC777

    Pods love the Volt.  I would love to have a few hundred thousand of you dolts buy them.  If you don’t get burned to death from the exploding batteries you will definitely find trouble should you find yourself in an accident.

    We could use a whole lot fewer pods at the ballot box.

    Also, the cost of running an electic vehicle varies greatly depending on where you live.

    “a kilowatt-hour average of 8 cents in Washington state to 36 cents in Hawaii”

    Not to mention the massive increase to those costs when the EPA gets through with their nonsense.  Not to mention the increased chances of hitting a rolling blackout when you need to charge your vehicle.

    Then, you have to weigh the time lost when you have to charge every 30 to 40 miles.

    Jay
    Is all for thinning the herd.

  • jeturcotte

    … Were you born with blinders on, or is there someone in your upbringing you can properly sue?  There are THOUSANDS of car fires among combustion-engine vehicles every year… and a whole ONE in a volt (though they are rare yet) and only then WEEKS after the event due to neglect in post-test processing.  Meanwhile, the damn vehicle is a serial hybrid… you don’t have to stop every 30-40 miles to recharge.  After a few hundred, you pop over to a gas station and stick what, in ICE terms is a mere sip, into the tank and keep on going… it’s a bridge technology until batteries are better and less expensive (and there are myriad operations promising to do just that (though there will be failures along the way.))  Still, a pure 30-40m electric would suit me just fine since my daily commute is less than 20 (total)… the 30/40 covers the vast majority (85%+ at last study) of commuters populating this country, and thus would make an incredible dent in our dependance not only on foreign oil, but ~all~ oil.  Yes, the car is expensive, though it is far from tiny… then again, the original cars were only accessible as the playthings of the rich to begin with too… meanwhile, there are dozens of facets of your everyday life that you take for granted that had to be either initiated, enforced, tested, proofed, or perfected by the same same government you condemn for trying to give us better options than we have now.  Anyhow, there’s no arguing with fools, now is there?

  • esto_perpetua

    Yes, at a cost of $6500 for a basic system to $12000 for a top of the line installation including a high capacity composite fuel tank (Popular Mechanics, Jan 2012). Add to that a minimum of $3500 for a home fueling compressor as the natural gas needs to be pressurized to 3600 psi. And this will be capable of 8 hr fill-ups.
    Need faster fill up? Use one of (only) 941 high pressure CNG filling stations (costing $750000 each) around the country, mostly in NY, CA, Utah and Texas. Sorry.

  • http://twitter.com/BcdErick BcdErick

    Yawn.  I guess you haven’t gotten the memo. “The One” has proclaimed that we all and that means everyone in America, “don’t understand the market”.  Only He does.  Bow down.

  • jeturcotte

    Here’s a question for you, though, rather than just a frustrated rant… how much do you think that gallon of gas you are buying REALLY costs you?  ’Cuz, unless you’re dodging your taxes, you’re paying a ~lot~ more than what the pump is telling you.  The author miscalculates in suggesting that current powers are trying to artificially make the price of gas higher in order to fuel demand for more efficient vehicles… when already the vast majority of the actual cost has been hidden from you (you pay it, instead, through taxes and medicare) to artificially do quite the opposite… perpetuate demand for a very impractical resource.

  • jagscl

    Actually, its not the same government that brouht innovation forth before.  It’s the partially transformed Government of Obama. GM was essentially stolen from secured creditors, given then in part to the unions and the rest retained by the USG.  GM as an independent car company, even if not going broke, would not have pushed as fast, spent so much money and wasted so much valuable time of its employees if the company were paying on its own.  So, Obama simply sticks it, once again, to the taxpayer to push on with something the public doesn’t want and attempt to force it on the public anyway.  If you want a Volt, fine, pay for it, but don’t ask me to pay for you. 

  • http://pulse.yahoo.com/_3SOXZGUNEDJWEIDGKSS36DFRXQ Raysea

    Natural gas is definitely a technology that is both less expensive and cleaner than either oil/gas or coal.  Given the state of the many very old power plants that burn dirty coal, the best thing we could do would be to subsidize the building of natural gas fired power plants, which are then used to generate electricity for electric vehicles (EVs) and plug-in hybrids.  The reason EVs hold out so much hope is that they are clearly much more efficient (over 90% vs 20% for ICE) and their torque range is significantly greater.
    Regarding the problems and potential hazards of battery technology, hybrids, particularly series hybrids like the Volt, provide a reasonable balance while the technology is in its infancy. If auto manufacturers would build more natural gas cars (I think only Honda produces them today), that would help to balance out the energy picture for the U.S.
    As we look to the future, it’s likely that there will not be a single unified solution to power our vehicles in the near future, but an array of propulsion choices. Those choices are likely to include EV, hybrid, natural gas, and more efficient gasoline and diesel motors. I say, bring it on.  The more choices the better. 
    The problem is that it’s difficult to introduce new technology, particularly when it revolutionizes the industry,  into the automotive world.  That’s one of the reasons that government support is used to assist in technological development.  Unfortunately, the government programs often dictate a particular technology (remember the corn-based ethanol?) instead of just supporting technological development irrespective of the specific technology.  That’s the result of our corrupt political system where, for example,  corn farmers must be rewarded because they represent a significant constituency, with powerful lobbying groups.
    Personally, because we have so many flex-fuel cars on the road (over 10 million in the US alone), I’d like to see the government support technology development more in that area, in addition to support for battery technology and natural gas.

  • JayC777

    Yeah, it’ll go a few hundred miles … ON GAS.  So, now, not only do you have the maintenance it costs for the electrical system it is combined with that of an ICE.  Woops!!!!!  I also only gets about 50 MPG. 

    “There are THOUSANDS of car fires among combustion-engine vehicles every year”

    Yeah, after the owner of the vehicle does something stupid first.  Just not quite as stupid as buying a Volt.

    Jay
    Is the one who is arguing with an abject moron.

  • mort_f

    batteries less expensive and better? Take a look at the elements that are prevalent in batteries, lithium, mercury, cadmium … all have major problems, some are banned by EPA. Perhaps someone will discover that magical element .. unobtainium.

    You denigrate oil. Perhaps you can read how NAZI Germany was able to synthesize gasoline from coal, of which we have beaucoup. Biofuels work also, I am not talking about ethanol, but its cousin methanol. Biofuels could be a useful byproduct of our sewage treatment plants.

    Spare me the nanny government that wants to protect me from every facet of life.

  • jeturcotte

    Sounds like a deal so long as I don’t have to pay for the military that ‘secures’ your oil, for the gigantic subsidies for your oil drillers and refiners, for the hospital bills for your mercury poisoning or burns from your exploding sink faucet, for the clean up of your neighborhood when a fuel line explodes or oil is spilled, for the reconstruction of your state when it is visited by yet another multibillion dollar environmental disaster brought about by increasing climate entropy, so on and so forth… I’d be so deeper in the black if I didn’t have to pay for all of that.  Meanwhile, look at who funded the makinac study in the first place… chemical companies who have a vested interest in maintaining an oil-addicted economy… and yet are still SUBSIDIZED with my money but without my permission, since we’re on that line of reasoning.

  • esto_perpetua

    Do you know anybody that installed a 3600psi separate fuel system in his backyard? You are countering my facts ( which are easily verifiable if one is not lazy) with bullshit.

  • Dustoff

    Wayne…
    There is one problem. Because the fuel tank is high pressure finding room for it is.

    Well a problem and it’s weight.

  • Dustoff

     Fueling a volt (or one of the other similar alternatives on their way to the market)
    +++++++++++++++

    Maybe you missed it, but the Volt requires HIGH octane fuel.

  • justinwachin

    The problem with electric cars is ultimately the source for the electricity. Even if the Volt became a sales leader it would not solve our energy problems. In fact, it would make the problems worse as it helped use up the electricity from our overworked power plants. 

    I’m all for renewable energy. I’m all for cutting off foreign oil. Unfortunately the Chevy Volt just isn’t the solution we need.

  • Dustoff

     He has some of it right. The high pressure tank is the biggest problem of all.

  • Wayne Peterkin

    The amount of pressure required to keep natural gas or propane in a liquid state is relatively little. It can hardly be described as “high pressure”. 

  • Dustoff

     The author miscalculates in suggesting that current powers are trying to
    artificially make the price of gas higher in order to fuel demand for
    more efficient vehicles…
    ***************************************

    Excuse me. O-dumber said he would do just that.

  • Dustoff

    Let’s see, how many years have elect cars been around?

    Quite some time.  Yet their numbers are so few.

  • sigp238

    One of the first early (100 years ago) cars was electric, steam was also tried. There is nothing like the internal combustion engine.

  • jagscl

    Jeturcotte, using the last sentence of my post to commence a diatribe not really worth responding to is one way to avoid discussing the real issue of Obama’s arbitrary and un-Constitutional acts, not just the theft of GM, but many others since the commencement of his regime.

  • MarcJ

    So what if the Volt is a bit more expensive to buy? After work you come home and the only thing you have to do is plug the little beast in; then hope Solyndra has enough juice left at $4 per kilowat-hour.

  • 1uncle

    The dimmos have bought millions of votes with our taxes and laws. Wrong as that is ,you cannot count them out. Nomobama is probably not legal and where did ‘executive order’   come from?  States formed the fed gov. for the specific purpose of protecting our borders. The idiot swore to uphold the constitution.  He is anti-american, unamerican, legal or not, probably not.

  • 1uncle

    The Volt like Solyndra was probably a political payoff, campaign contributions or helping auto unions(special interest group) Dimmos being dimmos.

  • mort_f

    Take a hard look at a hybrid that has been operating for almost 100 years. The diesel-electric submarine. On diesel power it will go about 10,000 miles, cruising at about 15 mph. On electric, with a battery compartment bigger than that diesel fuel tank, you are lucky to get 100 miles at 5 mph. And no diesel boat has ever been known to have a spontaneous diesel fuel fire. Would the same be true of the batteries. There were good reasons why gasoline boats were replaced with diesels, but spontaneous combustion was not one of those reasons.

    A simple fact of nature is that charging a battery creates heat. Discharging also creates heat. And the faster you do either, the more heat you generate. No storage battery technology has ever claimed to be 100% efficient, ergo, heat that must be dissipated.

    I will grant that there is a role for government sponsored R&D. R&D to develop a technology, but only as a pilot effort. When a technology has had a modicum of proof, then provide the technology to industry. But government should have no role in mandating, or subsidizing, production.

  • Atlasslugs

    Nope, you’re sure right about that. Merry—whatever.

  • Techquad

    3000 to 3500 Pounds per sq. inch is real high pressure. Liken it to a portable O2 tank for welding applications.  Break off a valve and you have a missle propelled by exhausting pressurized gases. Not  unusual on most constructions sites.  Not dangerous, unless improperly handled.

    Cng auto applications use “other than steel” for on-board storage. When designed into a car it is in or next to framing, when converted it is usually in trunk, in smaller vessels.  This application is roughly 6 times the potential press of propane cylinders.  My point is ; know what it is and design a complete system that is safe to operate in all conditions. 
    Fiat is most likely the auto maker with the most on the road in Italy and Brazil, but many others are Rushing into the gap. CNG is coming on more strongly than any electric battery system. And at far less cost and on-going maintenance cost. This is not a USA problem, yet. But recharging in a garage overnight is not my idea of a safe practice.  I would opt for a compression station outside the garage or enclosed area and storage tanks outside, then piping to where an auto can be quickly recharged in the same manner as in a refueling station. Lots  of volumn at HP, a quick charge up. The first applications in the US will be for large truck and bus conversions and distribution center to support trucker. Auto will follow the cost benefits of CNG and the life cycle of all CNG machines will stagger the auto designers and their “bean counters” trying to minimize costs over a short life cycle, it will not happen.

  • Techquad

    12-22-2011, Volt 6000+, cost taxpayer 800,000 each, sell at 33,000+, taxpayer pay 40000+ and the average buyer was in the 170,000 yearly earnings.  Not a Voks Wagon design for the masses, only they  have to pay for privledge to watch the elite motor around on their $$$$, Stupid is as stupid does. I rant on this all the time.

  • dreadnought61

    Keep driving those electric and hybrid cars. I need the gas for my Corvette!!!

  • fliteking

    Prediction: The libs start giving these things away to “the poor” .

  • fliteking

    In reality many electric cars are “Coal Powered” . 
    In a liberal world electricity “magically comes out of the wall”. 

  • jagscl

    Techquad, let’s be thankful there isn’t Obamacar and we have to buy one of the things.

  • http://www.facebook.com/Kennf1006 Ken Freeman

    yep on our nickel too…

  • http://www.facebook.com/Kennf1006 Ken Freeman

    @justinwachin:disqus I agree. I am wondering what has happened to the USG DOE that took over the “Cold Fusion” R&D. That seemed a very promising technology along with superconducting materials. A lot of technology still to come and on the board so to speak.

    For the conversation:
    The reasoning behind the 100+years of ICE/DE is because when it was developed as a pumping power source, the fuel was cheap, the design was simple and no one was thinking of the exhaust and its ramifications nor of the future and the infrastructure that has been created by Big Oil, Big Car and Big Gov’t contracts we now have in place to protect it all.  I don’t like it any better than anyone else but it is what we have.

    We don’t need more USG fingers in the pie or “helping us out”. There is newer technology coming. Let’s keep a cool head, bide our time and plan. There is a a saying “By failing to plan, we plan to fail”.  We can create better power and energy sources that will be better for all and less damaging or may even allow for the reversal of so of the man-made damage. Oil isn’t perfect and no one has said it is but remember this is a Capitalist culture we live in, at least for now still.

    I don’t think the Volt is the answer and I don’t like it being shoved down my throat by the Obamanation in the White House. I didn’t vote for him and won’t vote him, but we better have a better candidate than what is out there now to defeat him.

  • http://twitter.com/lindsaymanahan lindsay manahan

    my best friend’s aunt makes $70/hr on the laptop. She has been out of work for 6 months but last month her check was $8183 just working on the laptop for a few hours. Read this site NuttyRich.cöm

  • TheBitterClinger1

    A heavily subsidized electric car nobody wants? The tree huggers and EcoEgos let us down again. Perhaps Secretary of Energy Dr. Steven Chu and his flunkies can trade in their gas guzzlers for Volts and show we peasants how it should be done.

  • justsaynotosocialism

    Just as the Obama candidacy was predicated on a lie, so was the promotion and production of the Volt.  Remember the initial claims that it would go 100 miles on a charge and that the gas engine did not drive the wheels?  Then, it was learned that the engine DOES drive the wheels at highway speeds and that the electric-only range was not 100 miles, but 75 miles.  Then, when people started ‘experiencing’ the Volt, we were told that the electric-only range was 50 miles.  Now, in the real world, we are told it gets only 35 or so miles on a charge without support from the gasoline engine, and that in ‘optimal’ conditions.  Just as Obama will be defeated in 2012, so shall the BIG LIE of a car, the “Chevy Volt”.

  • justsaynotosocialism

    …and, all of this at $250k a pop…

  • A_Proud_Infidel

    The Chevy Volt, a FLAMING example of US Government waste!!

  • Ed

    Here’s a question for you, jeturcotte…  Where does the electricity come from when you plug the (partly) electrical car’s battery into its dedicated power outlet so it can be “used… and used… and used… and used over and over and over and over and over… charge after charge after charge after charge”?

    Given that you seem to be so energy savvy, what’s the energy source breakdown?

  • Vornak

    You point to one of the structural issues which are seldom taken into consideration.

    Fuel energy converted to ‘work’ in the vehicle has no transmission loss such as that associated with electric power generated possibly hundreds of miles away, from a power plant possibly using coal.

    We should think of electric vehicles today as mostly being powered by coal.

  • http://www.rant24x7.com/ ShainS

    LOL.  Okay, I like your mandate idea better … ;-)

  • Concerned4America

    They are ignoring the economies of scale and the effect of demand on the market. When enough cars are built or converted to natural gas the price of tanks will go down because they are mass producing them and there will be commercial filling stations. Perhaps LNG will be made safe which would provide more range etc than CNG. When a technology reaches a critical point in its adoption it starts to rapidly improve and the costs go down.

    We are talking productions systems here, not one off hobby installations.

  • http://pulse.yahoo.com/_FPOYT2KT2BYO3F7JAYTX2DZZKY DouglasH

    Dude, that is hilarious! Please finish it!

  • http://pulse.yahoo.com/_FPOYT2KT2BYO3F7JAYTX2DZZKY DouglasH

    An industry currently under attack by our communist administration!

  • http://pulse.yahoo.com/_FPOYT2KT2BYO3F7JAYTX2DZZKY DouglasH

    It might even light a fire under their arses!

  • http://pulse.yahoo.com/_FPOYT2KT2BYO3F7JAYTX2DZZKY DouglasH

    If it’s SO damned great, then why does it have to be subsidized?

  • http://pulse.yahoo.com/_FPOYT2KT2BYO3F7JAYTX2DZZKY DouglasH

    Spam

  • http://pulse.yahoo.com/_FPOYT2KT2BYO3F7JAYTX2DZZKY DouglasH

    Don’t give them any ideas!

  • Dons621

    About 20 years ago a guy converted a Subaru Brat to a Hybrid car using 24 volt aircraft starting motors and batteries.  Gas millage was 70 miles to the gallon. In 1934 a Canadian developed a Carbarator that gave high millage.  I remember paying 12 cents a gallon for gas.  And you people do not understand why we are paying #4.90 a gallon.   Wake up and smell the coffee, Start RECALL’s on ever POLITICIAN that was in office before 2010 and the problem will be solved.

  • http://twitter.com/hiltonius Richard Hilton

    this notion that the volt is more flammable than a “normal” car is ridiculous.

    http://blog.caranddriver.com/chevy-volt-hysteria-were-all-going-to-die-or-an-application-of-facts-and-rationality-to-flaming-batteries-and-melting-chargers/

    nice try.  you weaken the better points of your argument when you seek refuge in BS.

  • http://pulse.yahoo.com/_YS35IA2AAQW77RQDKPSSLFLIFM Ron

    I don’t know where you get this 3000-3500 psi cng. I had a friend that did a conversion years ago with his p/up truck and uses LP cylinders housed in the bed of his truck. He fuels up at propane delivery stations and his tanks weren’t anywhere pressurized near 3000-3500 psi…Very efficient running 350 4bbl V8…only required minor mods…

  • Techquad

    ron:
    never said high pressure was the only way to go, just more efficient form of carry gas. Plus in their tanks that are composite, much safer in case of accidents.

    Go to NatGasOwners .com and check out owners comments, lots of data and research matl.

    Yes and a friend put a RV tank in his Medium duty truck and a system to ‘cut in propane’ on a as needed basis. helped his diesel about 15% on hills. But when he traded up, he bouhgt a std v8 deisel.