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EDITORIAL: Unplug the electric subsidies
Billions more still won’t make customers buy toy cars
Question of the Day
President Obama stopped by Argonne National Laboratory in his Chicago hometown on Friday to demand Americans hand over another $2 billion in subsidies for electric cars. Liberals love trading in sensible sedans for these trendy “green” golf carts. Being seen behind the wheel of a quirky looking hybrid tells the world that “I care” about the environment.
Such motorists just don’t care enough to use their own money. So Mr. Obama seeks another cash infusion for “what should be our top priority as a nation.” It’s not as if Uncle Sam has been ignoring the toy cars. Taxpayers already offset $7,500 of the cost of every hybrid through a federal tax credit at a total cost of $2 billion. In addition, many states offer similar incentives of their own. The 2009 stimulus bill poured $2 billion into the development and manufacture of electric-car batteries and other components, and the Energy Department’s “advanced-technology vehicle manufacturing program” offers up to $25 billion in direct federal loans to electric car makers. Moreover, $400,000 has been wasted on “education projects” to promote electric cars.
Such princely subsidies haven’t sparked a lot of interest among consumers. The Congressional Budget Office noted in a report last year that electric cars are so much more expensive to produce that “the credits would have to be two or three times as large as they are now to make those vehicles cost-competitive” with reliable, gasoline-powered sedans. The auditors calculated a plug-in hybrid costs $19,000 more to produce, but over the car’s 150,000-mile life span it would only save $7,000 in reduced fuel consumption. Only people who can’t do math buy them.
Wealthy Hollywood celebrities, of course, are not limited by financial considerations. They’re always first in line to pick up the flagship electric cars, such as the $102,000 Fisker Karma and the equally pricey Tesla Roadster. Matt Damon, Ashton Kutcher and Leonardo DiCaprio can’t buy enough of the subsidized six-figure rides.
The president says, “Walk into any dealership today, and you’ll see twice as many hybrids to choose from as there were five years ago.” That may be so, since he can order Government Motors to shove more electric cars in its showroom. Apart from state and federal fleets, those cars aren’t going anywhere.
Lack of public demand for electric cars is what sent battery maker A123 Systems, recipient of $380 million in state and federal subsidies, into bankruptcy. Fisker Automotive announced on Wednesday that its founder and chairman, Henrik Fisker, had resigned. The Congressional Budget Office says there’s no future for this industry. “Unless consumers view electric vehicles very differently in the years ahead, sales of electric vehicles will probably be no greater than those of traditional hybrids because of their higher purchase price and lengthy recharging times.”
Worse, the driving force behind the subsidies is the insistence that carbon dioxide, which is a building block of life on this planet, causes the oceans to rise through global warming. Throwing billions more at electric cars will have “little or no impact on total gasoline consumption and greenhouse-gas emissions,” the government auditors noted.
So all of this crony capitalism accomplishes nothing beyond propping up — for a time — some fly-by-night companies. If the White House can’t afford to run White House tours, America can’t afford to subsidize Hollywood’s cars, either.
The Washington Times
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
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