Chevy Volt is Automotive Version of Solyndra
The story of bankrupt solar company, Solyndra, has turned into a major scandal for the Obama Administration as questions arise about the government's free spending of taxpayer money on failing so-called green initiatives. A $535 million federal loan was initially rushed through for the company as Obama touted Solyndra as being a prime example of how the bold new green-energy driven economy would create jobs while saving the environment. Now the results bring into question how dangerous the green economy strategy may be.
1,100 jobs were created at Solyndra at a cost to taxpayers of about half a million dollars per job. Both the jobs and the money are now gone. White House Press Secretary, Jay Carney, dismissed the failure by pointing out that there are no guarantees in the business world. Well here's a novel thought; ventures that are getting taxpayer money poured into them should actually be able to make a profit and eventually stand on their own. Dumping billions of taxpayer dollars into money losing green ideas like Solyndra, as well as on the dismally selling Chevy Volt, does nothing to help the economy or the environment.
A recent Reuters' article points out that the auto industry is relying on fleets to support sales of plug-in vehicles like the Chevy Volt. In a nutshell, this means that government agencies (along with cronies at GE) will use taxpayer funds to purchase Chevy Volts that have been widely rejected by retail consumers. All to support a vehicle that was developed using billions of dollars of that same taxpayer money. Not even the most naïve, green energy supporting apologist for the Volt can legitimately debate that the car is not profitable for General Motors. Former car czar, Steven Rattner, admitted that the vehicle had "commercial clay feet" and would not be profitable for GM in the foreseeable future. Yet this is not stopping the continued wastefulness of our government's taxpayer subsidized support for the vehicle as well as for a future Cadillac version of the car.
The Reuters' article wrongfully claims that fleets that purchase Chevy Volts can save money in the long run on fuel savings and maintenance. Let's get real. Given the Volt's capabilities to travel about 30 miles on a charge, the cost of electricity and the use of premium fuel for the vehicle, the ultimate daily savings on fuel (against a typical compact car) would equal about $3 a day or about a $1000 per year. The car cost over $20,000 more than competitive compact cars like the Ford Focus or the Hyundai Elantra. The environment would also benefit little, as a maximum of about one gallon of gas a day would be saved and there are negative impacts from lithium battery manufacturing and disposal. The limited benefits completely disappear when compared to hybrids like the Toyota Prius or even to more fuel efficient pure gas driven vehicles.
Much of the info in the above mentioned piece is derived from statistics supplied by the Electrification Coalition in Washington. While pointing out that the batteries used in cars like the Volt cost about $16,500, somehow the conclusion is drawn that buyers will save money in long term costs. No mention of the fact that presumed maximum battery life is less than 10 years and that the vehicles will have little value as they approach that age. But I would not expect an unbiased analysis from an entity named the Electrification Coalition.
The question remains why so much criticism is leveled at government wastefulness by the mainstream media and Republicans regarding the Solyndra debacle but the billions of dollars lost on the Chevy Volt folly gets little mention. As I have pointed out in the past, the fact that GM spends billions of dollars on ads seems to buy favorable coverage. As far as the lack of political criticism, perhaps some of that GM lobbying money is finding its way to Republicans as well as Democrats.
Crony capitalism should not be acceptable to the American voters, regardless of the parties involved. The 2012 presidential election will be greatly influenced by events like the Solyndra scandal and other accusations such as those leveled against Republican candidate Rick Perry for mandating inoculations of a vaccine manufactured by lobbying heavy Merck. If enough American people recognize the pilfering of taxpayer funds to support crony projects, the candidates will have to address the issues. The questions regarding the GM bailout and continued taxpayer spending to support vehicles like the Chevy Volt should have a prominent place in the presidential debates, as well as on those news networks that are receiving hundreds of millions of dollars from GM.
Mark Modica is an NLPC Associate Fellow.