Friday, August 6, 2010

Let's Get Out of the Car Business - Taxpayers Will Pay $7,500 Subsidy for Every Volt Sold

GM has turned out to be worse than the Post Office for the taxpayers, and if Obama has anything to do with it, which he does, the government will be subsidizing GM and Chrysler forever. Not only does the taxpayer pay for development and retooling for the Volt, the American taxpayer will end up paying for about 1/5th of each car sold. All this to payback the unions for their support of Obama and the Democrats.

At $41,000, about as much as the average American makes in a year, this is no people's car. GM, owned by the government and the labor unions, is pitching it to affluent hipsters who don't need a lot of space for a family. Deloitte Consulting says that the demand for such cars is from "young, very high income individuals" from households that make more than $200,000 a year, which is why the Volt will be rolled out in upscale, trendy urban markets. (Meanwhile the Chevy Cruze, the gas-only version of the Volt, has more room inside and is a mere $17,000.)

Because the Volt's sticker price might be too high for even that crowd, the government is offering a federal subsidy of up to $7,500 (Californians have a state subsidy, too), which means that working-class people will be helping to pay for playthings for upper-income people.

Indeed, the Volt's price is $41,000, but the cost is much higher. "Government Motors" is already selling the car at a loss. According to the blogger Doctor Zero, if you apply the subsidies that have gone directly into the car to just the first 10,000 vehicles, the cost is more like $81,000 per car.
Read Jonah Goldberg's article "Low Volt-age" here.

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