Sunday, August 01, 2010

Electrolitism

First the NYT, now Slate, recognize that Electric Vehicle subsidies are a boondoggle.  This Slate article points out that the market for 4 seat electric hatchbacks with the appointments of a Cobalt, but priced like a BMW 335i, is composed primarily of those whose household income is over $200K, and "where weather, state regulations, and infrastructure are all favorable to electric vehicles." This accurately describes certain areas in Southern California.

Read the whole thing at Slate, but here are some teasers:

...Annual sales [of all EVs] will hit no more than 465,000 by 2020 ... a mere rounding error in a 250-million-car national fleet.

...It's doubtful that the government's electric-car push can "create" net jobs, as opposed to moving them around within the economy. Absent robust consumer demand, of course, the new production facilities will go idle and lose money.

...The shakeout should begin within five years... [and] factory workers in Michigan will be back out on the street—unless their companies successfully lobby for a [yet another] federal bailout.

...Of all the findings in Deloitte's market research, the most poignant was its profile of electric car "non-adopters." They have average household incomes of $54,000, live in the suburbs and rural areas, and depend heavily on their cars. There are millions and millions of nonadopters all across America. They are the middle class.
It has been argued that the subsidies to manufacturers and to buyers are necessary for the preservation of the middle class.  In reality, the middle class are the people contributing the largest share of tax dollars to subsidize Volts and Leafs for drivers in West Los Angeles with household incomes of $200K - so that handful of UAW members may enjoy a very uncertain employment future.

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