When it comes to the Chevy Volt, the market has spoken. The Volt is not ready for prime time.
The facts are clear. GM sold 7671 Volts in 2011, short of its target of 10,000. GM sold about 1600 Volt in January and February this year, a far cry from the pace needed to reach the 45,000 target for 2013. The average household income of a Volt buyer is $170,000. Mainstream America is rejecting it.
Perhaps allegations of battery fires are to blame. Perhaps Americans are leery of a battery-operated car that can’t go beyond 40 miles before shifting to gasoline. Perhaps the $40,000 price tag is a bit steep. Perhaps the $7500 government subsidy isn’t enough.
There is little the President can do about these problems, except for one. On Wednesday, he proposed an increase in the Volt subsidy to $10K. Put another way, President Obama is proposing that $10,000 be transferred from taxpayers who choose not to buy a Volt to each taxpayer that does. $7500 was already $7500 too much.
In President Obama’s world, the Chevy Volt simply cannot fail. It’s a referendum on the GM bailout, the UAW, and “green” energy all rolled into one.
Apparently GE’s recent commitment to purchase 12,000 Volts wasn’t enough to boost sales. Don’t think for a moment that Obama’s ties to Jeff Immelt didn’t influence this decision. And don’t think for a moment that Immelt will actually drive a Volt on a daily basis.
President Obama simply does not respect markets. When consumer choice doesn’t deliver the outcomes he thinks are best for society, the President castigates the producers or manipulates the markets altogether with taxes or subsidies. When healthcare and gasoline cost too much, greedy producers are to blame. But when solar energy and Chevy Volts cost too much, greedy or ignorant consumers are the problem. While the President doesn’t refer to consumers as greedy or ignorant, his actions tell the story. He blames us for consuming more than our “fair share” of global oil while bribing us with tax dollars to buy more Volts. To the President, American consumers just aren’t capable of managing their own economic affairs without a heavy dose of central planning.
Perhaps the Volt will be a competitive car one day. New technology can take some time to develop, and I don’t have any problems with the Volt per se. I simply oppose the use of taxpayer funds to pick winners and losers in the effort to improve energy alternatives. This includes bailout funds, special tax breaks for GM, and subsidies for those who purchase Obama-approved products. Markets can do this more efficiently without Washington’s interference. Obama’s interference with market activity is both costly to taxpayers and counterproductive for society.