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credit: moodyeyeview.com

credit: moodyeyeview.com

From time to time an article surprises me. It touches a nerve out there in public, a nerve I didn’t suspect existed when I posted the article. Usually, it’s an article I considered unremarkable when I posted it, nothing special, nothing that would draw more response than normal. Such an article was posted on July 18, 2011: The Chevy Volt: And It Costs A King’s Ransom To Repair Too! 

To this day, I’m still getting comments on that article, some quite passionate, occasionally insulting, and most from Volt owners writing to tell me how wrong I was/am about the Chevy Volt, and to speak at length about their experiences with their Volts, expressed in the most sunny and optimistic terms, when they’re not insinuating I’m a nitwit for having concerns about EVs, and the Volt in particular.

The original article, updated twice, was primarily an exposition of the abnormally high repair costs for an early model Volt involved in an accident. It cost $14,187.00 to repair the vehicle, about half its post-federal tax rebate cost.

This shouldn’t be surprising. The Volt is a unique pseudo-hybrid that has the complete mechanical hardware and software of a gasoline-fueled vehicle, but also has the enormous and expensive battery and the complete mechanical hardware and software of a pure electric vehicle. This Frankenstein’s brew of components includes a number of expensive parts that are not required on gas-powered vehicles, electric vehicles, or normal hybrids. In addition, the lithium-ion battery presents fire and explosion hazards that require special shielding and other safeguards and controls that add to the complexity and expense of the vehicle.

Volts are also not produced in large numbers, so economies of scale are involved. The more vehicles produced and sold, the less expensive it is to produce them, and at least theoretically, the less expensive their parts. A limited production item like the Volt, particularly since GM loses money on every vehicle, has to be expected to be more expensive to repair than most vehicles.

All of this does not represent the evil machinations of an anti-electric vehicle zealot, but the realities of engineering and the marketplace. If Volts–and other EVs (the Nissan Leaf and the very, very niche Tesla)–are truly the future of automobiles, if they are truly capable of replacing conventional vehicles, why do they need multi-thousand dollar government subsidies to get them off the showroom floor, and why do many Chevrolet Dealers simply decline to stock them?

My favorite Bookworm has recently purchased a Nissan leaf, and not surprisingly, she shares some of my concerns. She has long owned and loved a Honda minivan, but recently went new car shopping: 

We started looking into alternatives and decided that the all-electric Nissan Leaf would be good. It’s a surprisingly spacious car, it handles well, it’s range easily encompasses my daily Marin roamings, and then there’s the real kicker:  Between federal and state incentives for electric vehicles, we get almost $12,000 towards a three-year lease.

That last factor makes the car eminently affordable. We’ll be paying only slightly more per month on the lease than I was already paying for gas. We’ll keep the old car for short trips or heavy loads (or for times when all three drivers in the family are heading in completely opposite directions), but we’ll use only the Leaf for the local trips.  Our electric bill will increase negligibly, our gasoline bill will decrease dramatically, and our monthly cash flow will be affected minimally.

Ah, honesty. Of course, knowing Bookworm, I could expect no less:

Nice as they are, I’m actually somewhat embarrassed by those incentives. Yes, it’s true that I pay substantially more in taxes than someone who doesn’t live a nice upper middle class life in Marin. But precisely because I am able to live this nice upper middle class Marin lifestyle, I don’t really need the incentive.

The incentives certainly encourage me to buy or lease an electric vehicle, so they fulfill the government goal of getting more people into EVs, but I think it’s wrong that lower-income taxpayers are compelled to support me in any way. They, after all, are still paying taxes but, even with the taxpayer-funded incentive, they still can’t afford a lease.

A Democrat in the California legislature finally figured out just how unfair this is and has a bill pending to add means-testing to the rebate:

Since 2009, California gave a $2,500 tax rebate on zero-emissions vehicles like the Tesla Model S and Prius plug-in hybrid. And here’s something that should surprise no one: The majority of those rebates went to households earning $100,000 or more. Now that could change.

A bill sponsored by California Senator Kevin de León (D-Los Angeles) attempts to address the fact that nearly 80 percent of those rebates went to households bringing in more than $100k and that almost half of Tesla Model S owners receiving a rebate are making at least $300,000.

‘A $2,500 rebate to purchase an electric vehicle is not likely to matter to someone earning over $300,000 a year, but it does make a big difference to someone earning $60k a year,’ said de León. ‘Every community deserves clean air, regardless of wealth.’

(Read more here.)

Although I think that bill is the right thing to do, I’m not going to stand on principle here and turn my back on any money the government wants to give me — or, more accurately, give back to me.  After all, thanks to the highest income tax in the nation, a lot of our family’s hard-earned money routinely goes to fund all sorts of ridiculousness, such as California’s infamous ‘train to nowhere.’  Getting some of my money back towards an affordable, practical car is a good thing.

Bless her little Bookworm heart. On one hand, if the government is giving out free money for something I need, and if you’re like me, never get any government handouts, why not? After all, some of it’s my money too. But on the other hand, there is no such thing as free money. People sometimes say: “I didn’t get any tax money for my EV; I got a tax rebate!” Uh, sorry, but whether the money actually touched your palm in the form of cash, was paid directly to a dealer, or you saved money because you had to pay less in taxes, that money–taxpayer money–came out of the public treasury.  Other people paid what you didn’t.

It might be noted that Bookworm is petite, around five footish, and the Leaf will surely fit her in a way that it wouldn’t fit me. I traded a Ford Fiesta–which was a delightful, high mileage, great handling, good-looking car–in on a Ford Focus, because it fit my 6’, 200+ pound frame much more comfortably. By all means, take the link and read her entire article.

Bookworm is also like, and unlike, most Americans. She’s unlike most in that an EV with a 40 mile range (approximately) will meet most of her daily driving needs. She also lives in California where the mostly sunny and mild climate is nearly ideal for EVs. She’s like most in that she understands that even she needs a conventional vehicle because EVs simply can’t meet many of the common needs of most Americans. A bit more Bookworm sense:

It still seems to me that the best way to power our world is to continue to rely on fossil fuel — that most reliable energy source — but to continue to work on ways to decrease the pollutants flowing from its use.  All these other things are pie-in-the-sky stuff.  Indeed, the fact that government needs to coerce and bribe people to use electric vehicles perfectly demonstrates just how ridiculous they are.  If they really were an affordable form of clean energy transportation, private business would be cleaning up on them without any help from the government.

As I’ve said, over and over again, one of my primary concerns, and primary reasons for writing about EVs–other than that I find the technology and societal implications interesting–is that they are not economically viable without substantial governmental support, not only in redistributing wealth to make them remotely affordable, but in governmental interference in the free market, particularly in the form of picking winners and losers. As Mitt Romney observed, Barack Obama is great at picking losers, and he continues to funnel taxpayer funds to them.

Taxpapers are no longer part owners of General Motors, but we lost at least $10 billion dollars on the GM bailout, and since those numbers come from the Obama Administration, I seriously doubt they’re accurate. No doubt the accurate numbers, which are surely much higher, were on Lois Lerner’s IRS-shredded Blackberry.

As I noted in the article at the last link, for 2013, GM slashed the Volt’s MSRP some $5000 dollars to about $34,995. And this was in addition to a $4000 dollar rebate for 2013 Volts. This is even worse for GM profitability on the Volt in that it refers to lease prices, which is another way GM has been getting Volts off the showroom floor: offering ridiculously generous leases. GM has had to admit that it does not make a penny on the Volt, but it has never admitted how much it loses on each vehicle.

But this is only a part of the EV financial horror story. Again, if you’re interested, take the last link and discover the reality of EV economics. Let’s get government out of the free market, not only in EVs, but in every facet of the economy. Let’s allow products to succeed or fail on their own merits.

In the meantime, I sincerely wish Bookworm, and every other EV owner/reader the best of luck with their EVs. I hope they meet their needs. I also hope they understand that EVs are not the future of automotive science, are not the saviors of the environment, and once politicians pull the financial supports out from under the industry and consumers–and that will happen, likely sooner than later–the already tiny market for EVs will rapidly dwindle.