More Taxpayer Largess for Chevy Volt— on Leases
The recent lowering of lease costs for the Chevy Volt led me to think about the amount of money General Motors or Ally Financial (also taxpayer-owned) was going to lose when the quickly depreciating leased vehicles begin to be returned. I then recognized another egregious waste of taxpayer money being spent to support the struggling car. Taxpayers are paying the tax credits, which go to the lessor of the Volt (most likely Ally Financial), to place Volts on the road for a limited period of time.
The typical Chevy Volt lease will be for a term of 36 months. The federal tax credit is $7,500. The Volt has an electric range equivalent to about one gallon of gas per charge. During the course of the Volt lease, the lessee can save about 1,000 gallons of fuel compared to owners of fuel-efficient, gas powered vehicles that cost half the price. So, taxpayers are paying $7,500 to save about $3,750 (assuming $3.75 a gallon) worth of gas. When will this madness end?
I just don't understand why there has not been more public outcry regarding the wasteful green initiatives that are doing little to benefit average Americans. GM shareholders, as well, should question the company's strategy of spending tens of millions of dollars to market a vehicle that sells in such small numbers. The Chevy Volt has been the epitome of government's green-inspired taxpayer waste and it is a matter of common sense, not politics, that leads to criticism of the vehicle. Can proponents of the vehicle honestly argue that it is fair to use $7,500 of taxpayer money to put the car on the road for three years and save $3,750 worth of gas?
I didn't see any instructions on IRS tax form 8936 that required a minimum term for leases, so it may be possible for an even more wasteful two year lease to receive the credits. Even at the above described scenario of a three year term, the cost compared to benefits of the EV tax credits on the Volt are hard to defend. You do not have to be a Rush Limbaugh fan to see how illogically and wastefully taxpayer funds are being used to help prop up sales for the Chevy Volt.
For those out there who wonder why there is more criticism for the Volt than the Nissan Leaf, I didn't see Nissan hyping the prospects of the Leaf to garner support for a taxpayer bailout and then continue with the hoax that there is high demand for the car. I also did not hear the President of the US say he would be driving a Leaf in five years. If President Obama wants to be pitchman for the Chevy Volt as he campaigns on the perceived success at GM and tries to usurp even more taxpayer money to support the vehicle (as he has with his request to raise federal EV tax credit to $10,000) than it is understandable for critics of EV subsidies for the wealthy to focus on the Volt. GM's ridiculous disproportionate ad spending on the vehicle shines a further spotlight on the car.
Republicans as well as Democrats deserve criticism if they allow the waste to continue. I guess you could say that the criticism is political, since it is the politicians who continue to waste taxpayer dollars on folly that only benefits cronies (like GE which will buy thousands of the cars and sell charging stations) under the guise of a noble green cause. It is obvious that spending billions of taxpayer dollars to support cars like the Chevy Volt, which at the current price can not succeed with or without subsidies, is doing nothing to help average Americans who are not only paying the subsidies, but are continuing to pay for the higher price of gas at the pumps.
Mark Modica is an NLPC Associate Fellow.
Author's Note: Savings omit the approximate $1,750 in electric costs for charging which brings overall savings over three years to about $2,000.