White House First to Say Chevy Volt Not Ready For Prime Time

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Steve Rattner photoMitt Romney has been criticized for stating that the Chevy Volt is an idea whose time has not come. We have gotten to a stage in the election cycle where even the slightest of criticisms against the Volt leads to outcries of a right wing, "wrong-headed" conspiracy to hurt sales of the vehicle. What has not been reported is the fact that the Obama White House was the first to say that the car was not ready for prime time.

A White House viability report from 2009 states that the Chevy Volt "holds promise" but is "projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable." Now isn't it interesting that the Obama Administration knew the limitations of the Chevy Volt (which has not changed since 2009) during the first year of the President's term but now that we approach 2012 elections Obama serves as Salesman in Chief for the car, even stating that he will buy one in five years? Anyone who now dares question the wisdom of spending billions of dollars on tax subsidies for the Volt is accused of having a political agenda and lambasted for criticizing an American-made car that will supposedly lessen foreign oil dependence.

The statements by the White House in 2009 are perfectly accurate. Even ex-car czar, Steve Rattner, has described the Chevy Volt as having "commercial clay feet." The market has proven the White House statements to be true as sales for the vehicle have never materialized to the extent that Government Motors projected. The original assessment by the Obama Administration that would explain the low sales for the Volt has now been usurped by a politically based plethora of excuses to justify why taxpayers have committed billions of dollars to build a car that the majority of consumers do not want. The excuses have ranged from lack of supply to the present right wing conspiracy farce.

The original White House report proves that the Obama Administration and Government Motors are well aware of why sales have not taken off, but they continue to deceptively spin the story as November elections approach and the President campaigns on the perceived success of GM and the Volt. More importantly, the car is a key player in the President's costly "green" energy policy which has done nothing to help with the rising price of gas or foreign oil dependence.

Even worse than the realization that Government Motors has been deceptive regarding the Chevy Volt potential (or lack thereof) is the appearance of an attempted manipulation of sales for the vehicle. Our government has used taxpayer dollars to give grants to localities for purchases of the vehicles and crony corporation, General Electric, now seems to be timing its purchases of Chevy Volts to coincide with the approach to November elections. The company has committed to buying 25,000 of the cars, but the low sales numbers for the Volt would indicate that the GE purchases have been back-end loaded just as GM steps up the Volt campaign. Tens of millions of dollars are also being spent by GM on an ad blitz for the Volt; a move which, given the low sales figures for the car, must be based on political rather than economic motivations.

The Obama Administration was right in saying that substantial reductions in manufacturing costs were needed for the Volt to become commercially viable. The problem is, Obama has decided to try and up taxpayer subsidies instead of having GM reduce manufacturing costs. The present federal tax credit is $7,500 for wealthy purchasers of Volts and the President wants to raise that to $10,000. This is in addition to State credits. So much for the rich paying their fair share.

Mark Modica is an NLPC Associate Fellow.