We’ve heard Obama assert ad nauseum that he has revived GM. Aside for the fact that it is not GM that he revived, rather the UAW, there is something even more fundamentally flawed with his assertion. GM sales did not spike as a result of organic growth in the company; they spiked as a result of taxpayer subsidies. Anyone could throw taxpayer money into a specific company and realize a short-term spike in sales. Nothing is more absurd than the supposed success of the Chevy Volt.
The National Legal and Policy Center breaks down the lopsided cost of the subsidies:
General Motors reported that it sold 2,851 Chevy Volts in September. The number is sure to be touted as a great success, even though the annualized rate of sale is still well below initial sales goals for the vehicle and no where near what conventionally-powered, mainstream cars sell. What is sure to be less publicized by the media is that the majority of the Volt “sales” were heavily subsidized leases that are costing taxpayers millions of dollars.
GM spokesman, Jim Cain, told me that a full two thirds of Volt sales were leases. Backing out leases and fleet sales, about 900 of September’s sales were to retail customers with about a 100 going to fleets. As previously reported, many of the leases are for two year terms that can cost lessees as little as $4,000 to $5,000 out of pocket as taxpayers are on the hook for the federal subsidy of $7,500 per vehicle which goes to dealerships to lower the cost of the leases. So taxpayers are actually paying over 50% more than lessees in many instances. It is important to remember that the “cost” of a Volt does not come down because of subsidies; it is only borne by others who are paying for the subsidies.
Drivers of the Chevy Volt can expect to get about 30 to 35 miles on a charge before switching over to premium fuel. The vehicles also use a small amount of gas while in electric mode. Comparing the Volt to a fuel efficient, conventionally-powered car therefore gives evidence that the gas saved is about a gallon of gas a day under a scenario where the car is driven over 30 miles a day. So, under what would be near optimal conditions, the Volt will save under 750 gallons of gas over the span of a two year lease. That would save drivers up to almost $2,500 (at $4 a gallon for gas and 70 cents in electricity per charge) while costing taxpayers $7,500, or over $10 for every gallon of gas saved.