More Bad News for the Chevy Volt

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Volt photoAs General Motors gambles on ramping up production of the Chevy Volt, a couple of new reports point to headwinds for demand of electric hybrid vehicles, like the Volt. A new British study disputes the perception of eco-friendliness of electric vehicles. The study takes into consideration driving, manufacturing and disposal and undermines the case being made for a rapid introduction of electric vehicles as a means to address environmental concerns.

According to a piece posted on theaustralian.com, "emissions from manufacturing electric cars are at least 50 per cent higher because batteries are made from materials such as lithium, copper and refined silicon, which require much energy to be processed." The bottom line seems to be that vehicles like the Chevy Volt are not as green as perceived to be.

Another recent report published by the Reuters news agency reveals that the consulting group, Boston Consulting, lowered its estimate for electric vehicle market share. Coincidentally, the Boston Consulting Group was the firm hired by our government back in 2009 to advise on the GM and Chrysler bailouts. Bloomberg.com reported at the time that the consulting group was paid $7 million by the Treasury Dept. Boston Consulting Group now claims that electric vehicle market share may only be 5% or less by 2020. The report also points to the risks for car companies betting big on electric cars, like GM has done with the Volt.  Regarding the risks, Xavier Mosquet, the global head of the group's autos practice states, "If I'm one among many, it's a nightmare. If you're the fourth or the fifth in the series, really you spend a lot of money and you don't get anything." The logic of this statement is hard to ignore given the fact that GM and taxpayers are losing money on the Chevy Volt gamble.

The wisdom of producing money losing electric vehicles that seem to offer little benefits to the environment should be further questioned. Particularly when taxpayers are subsidizing cars like the Chevy Volt with a $7,500 tax credit. At a time when Democrats are calling for the wealthy to pay a higher share of taxes to address a growing budget deficit, why are buyers of cars that cost over $40,000 (seemingly with little or no benefit to the environment) receiving subsidies? The case is even worse for Tesla's electric car, which costs over $100,000 and also qualifies for the $7,500 tax credit. It is not the average working class American buying cars like this, why should they be the ones subsidizing the purchases? While debating the perceived benefits and value of the Chevy Volt may not be politically correct, it is nonetheless a debate worthy of having.