Posted by: conservativecritic | December 24, 2011

Chevy Volt Costing Taxpayers Up to $250K Per Vehicle!!!


March 3 morning news, General Motors ( GM ) Friday announced that it will be held this month to stop production of the Chevy Volt electric car. The cut-off time of up to five weeks because of weak car sales, poor consumer appeal.

In the period from March 19 to April 23, GM Volt plant in Hamtramck, Michigan will be closed about 1300 workers will be temporarily unemployed.

Universal fanfare last year to launch the Chevy the Volt, but the poor start, sales have been no improvement. 7700 Volt electric car sold only last year, well below the 10,000 target and far below Obama’s projections for alternative energy vehicles.

To artificially goose General Motors’ Chevy volt sales, the Obama administration didn’t just hand $7,500 to its wealthy buyers (buyer demographic: incomes over $200,000) — it  also was “ghost-buying” Volts via stimulus funds for townships and corporate cronies like General Electric. Including the federal government’s own purchases of the plug-in electric, some estimates put 20 percent of the Volt’s first-year sales as Big Government purchases.

So much for consumer retail demand.

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy which amounts to a public subsidy for the Volt amounts of $3 billion, putting the public subsidy per car at a whopping $250,000 per car!!

Obama has the public paying $250,000 in taxes to “subsidize” each Chevy Volt purchased…

Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.

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 those 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.

Remember, these are those wonderfully new lithium-ion batteries which explode and may cause fires after a car impact.  Here is a Volt that sustained accident damage and days if not weeks later the battery blew up and demolished the unfinished job of the accident.

Chevy Volt crash…and an exploding lithium-ion battery days or weeks later!

Lithium-ion batteries are still a pipe dream for cars – while they may have some redeeming value for laptop computers and hand phones…the following chart shows the very limited operating range of the lithium-battery …outside of this limited range, the battery is unsafe at any speed or voltage.

Now back to Obama’s crony capitalism designed to pump up “green” industries…at taxpayer expense. By the way, General Motors is offering to buy back the Volt cars sold…too much bad publicity I guess.

The $3 billion total Volt subsidy figure includes $690.4 million offered by the state of Michigan and $2.3 billion in federal money. That’s enough to purchase 75,222 Volts with a sticker price of $39,828.

Additional state and local support provided to Volt suppliers was not included in the analysis, Hohman said, and could increase the level of government aid. For instance, the Volt is being assembled at the Poletown plant in Detroit/Hamtramck, which was built on land acquired by General Motors through eminent domain.

“It just goes to show  there are certain folks that will spend anything to get their vision of what people should do,” said State Representative Tom McMillin, R-Rochester Hills. “It’s a glaring example of the failure of central planning(read – Obama Green Program propaganda) trying to force citizens to purchase something they may not want. … They should let the free market make those decisions.”

“This might be the most government-supported car since the Trabant,” said Hohman, referring to the car produced by the former Communist state of East Germany.

According to GM CEO Dan Akerson, the average Volt owner makes $170,000 per year.  This is clearly not your “father’s Oldsmobile” and is out of the practical financial range of buyers who might benefit from the potentially lower fuel operating costs….if they could digest the sticker price of $40,000.

Earlier this year, the Norwegian “THINK” electric car went into bankruptcy due to the carmaker’s inability to attract long term fiancing.  Actually, smart investors are avoiding most “green” projects due to solicitor’s fudging  the books or simply the huge amount of R&D needed to ensure that such vehicles are safe(see lithium-ion discussion above) plus manufacturer’s front loaded expenses elevating showroom prices to non-competitive levels/

According to 24/7 Wall Street, the hybrid and all-electric car market share has always been projected to be quite small.  Investors(except the Obama administration, apparently) can figure out these income and balance sheets and simply steer away from sure disaster.

What is swept under the rug in all of this hybrid and all-electric car discussion is the fact that the electricity required to charge the battery when the car is at rest will be in excess of existing electrical demands….and any discussion of supposed “reduced carbon emissions” is simply horse puckey because electrical generation systems(coal, gas, etc.) must pick up this additional demand…and theoretically produce an equivalent amount of carbon gasses…

I guess the radical environmentalists still can’t get their stories straight – or they simply expect that the general public is too dumb to do the math.



  1. We occasionally get a response to this blog from individuals who don’t seem to have a realistic view of how the auto business works or how stimulus funds were dispersed. Rather than bore you with their convoluted thinking, just remember that the billions of dollars which went to these companies went primarly toward union funds for pensions, jobs retention and parts procurements to build the initial vehicles…not new and sparkling facilities to build such vehicles…the vehicles are built, and manufacturers are simply trying to recover much of their own research and development(not new facilities)…more later…(I sometimes tire of hearing from respondents who must be living under some large rock or who don’t follow the business news in the major and minor media..)

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