Why Continue To Provide Subsidies For Electric Cars?


The Spark is Chevy’s new entry into the electric vehicle race.  Unlike the Spark’s big brother, the Chevy Volt, the Spark is all electric. (The Volt it is a hibrid as it has a backup internal combustion engine.)  Chevy has not specified a range with a full battery charge or a price.  But the Associated Press (AP) reports that the range will probably be like the Ford Focus—76 miles on a charge–and at a price less than $25,000 when the Fed’s $7,500 is deducted.  
 
What is wrong with this picture?  The gasoline powered Spark sells for $12,245 without any Federal subsidy.  So the production cost with profit (maybe) for the electric Spark is in the range of $32,000.  The gasoline powered Spark goes out of the showroom at roughly $20,000 less.  And even with the Fed Subsidy thrown in for the electric version, the gasoline version cost half as much.    
 
According to the Denver Post: “Since 2008, taxpayers have spent or provided loan guarantees of $6.5 billion for electric vehicles. That includes $2.4 billion for battery and electric drive component manufacturing, $3.1 billion in loan guarantees for electric vehicle projects, and $1 billion in tax credits for the vehicles.”
 
The Detroit News reports that GM plans to build 500,000 electric vehicles by 2017. Assuming they do this and sell that many cars,  you and I–the taxpayers are on the hook for $7,500X500,000= $3.750 billion.  And that would not include the subsidies given for sales of other manufacturer’s electric vehicles in that time period.  Suspending your view of the advisability of having subsidies for these cars in the first place,  do you think that if sales are that robust, they should continue to be given subsidies?  I don’t.
cbdakota
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One response to “Why Continue To Provide Subsidies For Electric Cars?

  1. A motivating discussion is definitely worth comment.

    I think that you should publish more about this issue, it might
    not be a taboo subject but usually people don’t speak about such subjects. To the next! Many thanks!!

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