Free Markets, Free People

Chevy Volt

Markets vs. central planners … learning the lessons all over again

Here’s how markets work.  From Toyota:

It said today it will not release its proposed mass-market mini e-car, the eQ. The reason: there’s no demand for it, not while battery technology is failing to provide comparable range to a tank of petrol. The natural gas boom in the US has seen prices of the fuel plummet, in turn reducing the cost of electricity generated by burning it. The Japanese car maker said today it will release 21 hybrid gas-electric models in its line-up by 2015.

Reality rules:

“The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge,” said, Uchiyamada, who spearheaded Toyota’s development of the Prius hybrid in the 1990s.

Here’s the market not working because of government intrusion (and ownership):

Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

[...]

It currently costs GM “at least” $75,000 to build the Volt, including development costs, Munro said. That’s nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part ofPresident Barack Obama‘s green energy policy.

A pity these things have to be continually pointed out.  But, of course, it won’t stop those who want government to decide what we should be driving instead of consumers and think subsidies will foster that desired behavior.

Two non-partisan government agencies — the Congressional Budget Office in Washington, D.C. and Parliament’s Select Transport Committee — conclude that during the next decade at least, the giveaways will have little impact on sales of plug-in hybrid and all-electric vehicles, or on gasoline consumption and greenhouse-gas emissions. Their main beneficiaries: affluent purchasers who’d buy the vehicles anyway.

“… during the next decade at least …?”  Love that caveat, don’t you?  They never work if it is something consumers don’t want. See current example for proof.  In the case of the market, it’s moved on … and much faster than government can react.  As usual, government has backed a loser.

The frenzy over shale gas deep under Ohio and other states has the makings of a different kind of rush on the nation’s highways. Businesses, cities, metropolitan transit systems and even school districts across the nation are edging toward a switch from diesel and gasoline to natural gas. Converting cars and light trucks to use either gasoline or natural gas is expensive. And heavy trucks designed specifically for natural gas also cost more than conventional diesels. But at current prices, engines that can run on natural gas cut fuel bills in half or better.

And GM has the Volt.  You have to laugh at the fact that the central planners invariably always get it wrong.

You’d have think we’d have learned that by now, wouldn’t you?

~McQ

Twitter: McQandO

Facebook: QandO

Chevy Volt: “Car of the Year” in Europe

This is so loaded with irony I can’t even count the ways:

Days after General Motors announced it was temporarily suspending production of the Chevy Volt, the electric car was named European Car of the Year.

The Geneva Auto Show announced Monday that the Volt, which is sold in Europe as the Opel Ampera, was named its 2012 Car of the Year ahead of its annual car show that opens this week.

Europe, tottering on the brink of financial collapse because of unsustainable welfare state spending names a heavily subsidized car from a company owned in the majority by government that no one will buy as its pick of the litter (why, because it fits an agenda that no one buys as well).

Of course it’s Europe’s “Car of the Year”.

You just can’t make this stuff up.

~McQ

Twitter: @McQandO

An Electric Car Mandate?

The editors of the Washington Examiner consider the probable effects of the new CAFE standards (being imposed by the EPA now instead of NHTSA) and ask a pertinent question:

Getting from the current 35 mpg CAFE standard to 54.5 can be achieved by such expedients as making air conditioning systems work more efficiently. We have a bridge in Brooklyn to sell to anybody who thinks that’s even remotely realistic. There is one primary method of increasing fuel economy — weight reduction. That in turn means automakers will have to use much more exotic materials, including especially the petroleum-processing byproduct known as “plastic.” But using more plastic will make it much more difficult to satisfy current federal safety standards. The bottom-line will be much more expensive vehicles and dramatically fewer kinds of vehicles.

[...]

Total costs, as calculated by the EPA, will exceed $157 billion, making this by far the most expensive CAFE rule ever. For comparison, the previous rule in 2010 cost $51 billion, according to the EPA. But the EPA doesn’t include this fact in its calculation: Annual U.S. car sales are 14-16 million units, yet over time, this rule will remove the equivalent of half a year’s worth of buyers. Will that be when the EPA takes a cue from Obamacare and issues an individual mandate that we all must buy Chevy Volts?

I’m just curious, for those who support the individual mandate dictated by Obamacare, what is the argument that such an electric car mandate isn’t possible? If the federal government can force us to purchase insurance from the companies it allows to offer the product based on the idea that health care is a national issue, how is promoting cleaner air and more energy security not the same thing? Indeed, it would seem that the arguments are even stronger for forcing everyone to buy electric cars if furthering the “common good” is the only real restriction on federal power.

So what is the difference from a legal, constitutional standpoint? Is there one?

115 year old electric car gets same mileage on charge as Chevy Volt

We’ve come a long way baby:

As the New York Times reported September 5, “For General Motors and the Obama administration, the new Chevrolet Volt plug-in hybrid represents the automotive future, the culmination of decades of high-tech research financed partly with federal dollars.”

Decades of research.   Yield?  40 miles on a battery charge.

Meet the Roberts electric car. Built in 1896, it gets a solid 40 miles to the charge — exactly the mileage Chevrolet advertises for the Volt — the much-touted $31,645 electric car General Motors CEO Dan Akerson called “not a step forward, but a leap forward.”

The executives at Chevrolet can rest easy for now. Since the Roberts was constructed in an age before Henry Ford’s mass production, the 115-year-old electric car is one of a kind.

What a leap, no?

Yeah, I know, the Volt is much heavier, yatta, yatta, yatta.  But seriously, if it was really a “leap forward” and the “culmination of decades of high-tech research”, why does it get the same per charge mileage as a car 115 years old?

I mean maybe I have a higher standard for things described as a “leap forward” and perhaps I expect too much from the “culmination of decades of high-tech research”, but 40 miles a charge?  Come on.

So why didn’t the Roberts catch on then?  Well, the market said “no”:

If you didn’t know there are electric cars as old as the Roberts, you aren’t alone. Prior to today’s battle of electric v. gas, there was another battle: Electric v. gas v. steam. This contest was fought in the market place, and history shows gas gave electric and steam an even more thorough whooping than Coca-Cola gave Moxie.

Now, of course, we find that the market isn’t to be trusted and government knows best – thus the “leap forward” (sound familiar to anyone?) and the brutally poor sales of the Chevy Volt.

Yes, friend, you’ve got it.  We’re again seeing the government – which knows best – picking winners and losers.   Except, as usual, the government’s winner is a loser.

Can you say Solyndra? 

Sure you can.

~McQ

Twitter: @McQandO