NCPA - National Center for Policy Analysis

Obama's Electric-Car Cult

November 3, 2010

Maybe it was karma, but the Volt's launch coincided with the publication of a 72-page report by J.D. Power and Associates that confirmed, in devastating detail, what many other experts have found:  Electric cars still cost too much, even with substantial federal subsidies for both manufacturers and consumers, to attract more than a handful of wealthy buyers -- and this will be true for at least another decade, says the Washington Post.

  • The Obama Energy Department has suggested that, with the help of federal money, manufacturers can ramp up mass production and bring the price of electric-car battery packs down 70 percent by 2014 -- thus rendering the cars more affordable.
  • But J.D. Power is skeptical: "Declines of any real significance are not anticipated during the next 5 years," the report notes, adding that "the disposal of depleted battery packs presents yet another environmental challenge."

In addition, what little gasoline savings the vehicles achieve could be had through cheaper alternative means.  And electrics don't reliably reduce greenhouse gas emissions, since, as often as not, the electricity to charge their batteries will come from coal-fired plants.

Nor are industry and government close to resolving the lack of a nationwide recharging infrastructure -- or the vehicles' poor performance in cold weather or on hilly terrain, says the Post.

  • 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).

In short, 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.

Source: Charles Lane, "Obama's Electric-Car Cult," Washington Post, October 30, 2010.

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