Many children woke up on Christmas Day to find to their delight an electric car under the tree. Whether a slot car on a figure-eight track or a remote-controlled racer that can do jumps off the driveway, these classic toys are always an appreciated gift for boys and young men.
For the past several years, federal and state governments have spent billions to persuade grown-ups that they, too, should get an automobile that plugs into the wall. A U.S. Energy Information Administration report conceded last week that having Uncle Sam play the role of Santa for electric car makers hasn't worked. The Energy Department statisticians predict 1 percent of America's automobile fleet will be a plug-in hybrid or all-electric vehicle by the year 2040. That's "up from negligible shares in 2012," the report cheerfully notes.
The taxpayer money invested to achieve this pathetic 1 percent is staggering. Earlier this month, California granted Tesla Motors a $35 million tax break in tribute to the firm's political correctness. The firm produces an electric sedan, but only for the "1 percenters" who can afford the sticker price, ranging between $70,000 to $105,000. "I'm pleased we could take this action to encourage Tesla to expand its electric-vehicle production in California, which will create green jobs and improve our air quality," says state Treasurer Bill Lockyer.
Tesla got its start with a $450 million loan from the federal government, which it paid back earlier this year. The company is profitable, but not from selling cars. Tesla also sells "regulatory credits, such as zero-emission-vehicle and greenhouse-gas-emission credits," as recorded in filings with the Securities and Exchange Commission. California legislators have ordered Ford, Toyota and other big automakers to produce a certain number of electric cars each year. If they don't, they must buy credits from companies such as Tesla. California has figured out how to force Tesla's competitors to write the checks needed to keep Tesla's factories open. The forced subsidies totaled $130 million over the past nine months. Without them, Tesla would be a money-loser.
The government offers inducements — some call them bribes — to lure prospective buyers into Tesla's showrooms, including a federal tax credit of $7,500 and a $2,500 state credit for California residents. California declares Tesla owners to be better than everyone else, enabling them to drive solo in "high-occupancy" vehicle lanes, zipping past the less well-to-do who are stuck in traffic in their Honda Accords and Toyota Camrys, even though both are certified as "ultra-low-emission" vehicles.
The good news is, these drivers of old-reliable cars will be paying less at the pump. The Energy Information Administration predicts the price of gasoline will drop through the year 2017. Government statisticians see the country growing less dependent than ever on Middle Eastern cartels and project gasoline to cost at most $3.90 per gallon in 2040 — far less than the $10 a gallon European-style price the Obama administration thinks we ought to be paying.
Whether designing a car or running a business, the government is ever clueless. If the public changes its mind and wants electric cars, all the automobile companies, at home and abroad, will elbow each other out of the way to build them — no federal and state subsidies needed. Until that happens, cars with an extension cord will remain a child's electric dream.