Slashdot Mirror
Electric Car Subsidies As Handouts For the Rich
Atypical Geek writes "Charles Lane, writing for Slate, argues that subsidies for electric cars are an example of 'limousine liberalism' — a lavish gift for well-off Americans to buy expensive cars for the sake of appearing green. From the article: 'How rarefied is the electric-car demographic? When Deloitte Consulting interviewed industry experts and 2,000 potential buyers, it found that from now until 2020, only "young, very high income individuals" — from households making more than $200,000 a year — would even be interested in plug-in hybrids or all-electric cars.'
Lane also takes issue with the billions of dollars in subsidies offered to automakers for the manufacture of batteries, arguing that research (warning, PDF) concludes that the money will not help in jump-starting the economies of scale that will drive down prices. At least, not as much or as quickly as the President has argued."
The billion dollars are there to drive research for better technology, which hopefully will drive down prices. And when compared to subsidies that other industries get (e.g. the big oils), that few billion dollars is just a drop in the bucket. Look, a few $B may be a lot of money for an individual, but when talking about a whole industry, it's not a lot at all. If anything, it's underfunded.
Most new technologies end up in the hands of the rich first, mainly because of the costs of production. Over time, if the technology ends up proving itself and becomes cheaper to produce, it starts to permeate itself into the rest of the market, it's just simple economics. Just look at the PC, most families couldn't afford one until well into the late 90's.
They're claiming to be able to predict vehicle buying patterns 10 years in advance, not just the technology, but the income level of customers who will buy cars that won't even be on the drawing board for 5 more years.
Then it recommends diverting the flow of money spent trying to improve EV's into improving gasoline powered vehicles. Wow, that solves all our problems!
This sentence no verb.
These cars make no economic sense because the cost adder for the hybrid/plugin drivetrain never pays for itself in saved fuel compared to a reasonably-priced econono-box like the Mazda3 or Ford Fiesta. Therefore, only wealthy JEWS wishing to appear green to their snobby rich JEW social elitist friends will buy these.. It's easy when you don't work for your money and have no sense of value.
It's funny how you can just go on and on with any kind of delusions as long as you remember to use the magic "liberal" word. I changed your quote to show that it's the same as classic anti-semitist stuff: just say that they have lots of money, don't have to work, and form strange networks and you don't need to base anything on facts.
Also notice how these "liberals" should buy really small fuel-efficient cars instead, but so-called conservatives can drive whatever they want. Also notice how it is implied that no one "conservative" is ever a slacker born into wealth. After all, that has never happened.
I'm not from the US. Where I'm from, there's no liberal/conservative dichotomy. This means we on average have a better grip on reality. Of course, the article with its "limousine liberal" thing is a huge trollbait in itself, so nothing good will result.
Electric cars make no economic sense at this time, which is why we don't drive them.
Electric cars would make economic sense in a truly free market. Unfortunately, the market is quite distorted.
There are huge externalities with fossil-fuel vehicles—air pollution, climate change,oil spills, etc. These are effectively subsidized by everyone, lowering their price far below what it should be.
"Electric cars make no economic sense at this time, which is why we don't drive them."
They would make a lot more financial sense if the government would stop subsidizing the oil industry so heavily. But hey, since when have Fox News neocons been interested in facts?
I don't respond to AC's.
The Nissan Leaf is scheduled to debut with the price tag of around $32,000. I wouldn't call it cheap but I wouldn't call it a prohibitive luxury good. With federal and state tax subsidies, it makes it cheaper and a working incentive to go electric
Meanwhile a Civic will cost you around $20k and can drive more than 100 miles without waiting hours to refuel.
Even if you don't need to travel long distances, $12k will buy you a lot of gas.
New York city is actually doing just that. Working with cab companies to replace their fleets of 12 mpg crown vics with high efficiency and hybrid vehicles.
I'm slightly skeptical on this research as well on three fronts:
1) A fully loaded Prius with range extender batteries (allowing for full electric 30-50 miles depending on kit) comes in at right about $31k. The new Volt comes in at $41k. But the Volt has a $7500 federal rebate and some states are putting up another $1-4k rebate. Which puts it's price right in line with the Prius. You don't have to been in the $200k/year income bracket to be interested in that.
2) I am very interested in the full electric, the only reason why I haven't persued it is because I commute 40+ miles on interstate/highways twice a day. Full electric is unbeatable for surface street driving, but up on the interstate, Diesel is king. There's no way a Prius/Volt will recoup the savings when compared to a VW TDI pushing 50+ MPG on the highway. And I am noooooo where close to $200k/year. Heck, many of my friends have also stated their interest. To the point where a few folks have been pestering me to convert the old Fiero to full electric. There is significant interest in the electric market from the $100k/year bracket. There would be even more if they could get the market price down to $25k.
3) A full electric can easily out perform and present a ROI in the life of the car over econoboxes when driving to their strengths. Again, up on the highway, electric isn't going to be all that great, but if you do nothing but stop and go commutes for short ranges every day, the full electric is going to pay off big time over even a decent mpg econobox.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
You ended up supporting the premise of his point by acting as the kind of liberal guy he was mocking. Instead of responding with facts, you used emotional by somehow relating his criticism of the environmentalist movement to that of anti-semitism. There's zero logical leap for that comparison--you're just replacing words and acting as if that's a rebuttal.
You also claim "conservatives can drive whatever they want," which wasn't said. The point is that rich liberals drive these cars, so that was the subject of the post. Conservatives weren't even mentioned. You took it as a personal attack on your ideology, so to respond, you had to bring up conservatives for some reason and draw a bunch of conclusions out of thin air about what you thought was implied by the post.
In fact, you're the one making implication that only conservatives could agree with the post, turning it into a battle of us versus them. You're encouraging the very dichotomy you claim to live away from.
No, the "liberals" being discussed here are the same ones that tell the rest of us that we must make sacrifices, that we must cut back. They expect us to ride the bus, but they won't provide the fundage. They'll just raise taxes. They are as phony as three dollar bills, and no different from the so called "conservatives". They're both top down types who want control. And both use their money to keep it.
I'm not from the US. Where I'm from, there's no liberal/conservative dichotomy.
No? I suppose there's no rich/poor dichotomy either? No social stratification of any kind?
For justice, we must go to Don Corleone
Exactly which liberals told anyone except the very rich to make any sacrifices?
Putting the Ford Fiesta on the table immediately destroys the comparison. American automakers view
economy vehicles as just a means to get to a cheap frontend pricetag. They are crap cars that tend
to implode as soon as their warranty expires and are not likely to make it to 10 years on the road
like a Mazda or Toyota.
They also tend to be much more likely to be driven by the "working poor" that probably don't bother
to do basic maintenance on the cars (due to cheapness) also decreasing the likely lifespan of the
cars.
HELL, just the bargain benefit of driving ANY Toyota for longer than a Ford is bound to be considerable.
Our last Ford was by no means an "econobox". However, it too had an unacceptably early demise.
A Pirate and a Puritan look the same on a balance sheet.
Isn't it a little disingenuous to compare a Prius to a bottom-of-the-barrel car like the Ford Fiesta? Why not compare apples to apples, like a Prius to a Honda Civic/Ford Focus, or a Ford Fusion to a Honda Accord?
"...always new atoms but always doing the same dance, remembering what the dance was yesterday." -Richard Feynman
That economies of scale is a red herring argument. Right now electric cars are expensive because the basic technology is expensive.
The technology is only expensive because it is not yet done on a mass scale. None of the materials involved are prohibitively scarce. None of the manufacturing processes are grueling or unusual.
Bringing more buyer allows more efficient methods, factories, and basic econometrics of scale to be applied.
That being said, giving tax-break subsidies to buyers is absolute the wrong way to go. Just as all college tuition rises to absorb the available scholarships, EV prices will remain high as long as there are funds or tax breaks available.
However, waiting for more research has never proven to be a cost effective method either. How long would we have waited for a Droid-X or an iPhone if someone wasn't willing to buy a those old Analog Motorola half clam shell phones?.
You have to field something that is less than perfect in order to obtain revenue, attract customers, develop support infrastructure, and build manufacturing capacity.
Nothing in the real world is developed beyond prototypes in the lab before it is marketed. Government funded research is best used as seed money. We are well past that stage now.
Progress is slow because everyone is sitting on their patents.
Sig Battery depleted. Reverting to safe mode.
Tesla Roadster production began in 2008 MSRP- $109,000
Chevy Volt production began in 2010 MSRP- $41k
Nissan Leaf production began in 2010 MSRP- $32.8k
With only three models of electric vehicle on or close to the US market, it'd be difficult to make a call as to the impact of the subsidies. Considering that the $7,500 credit brings the cost of the Volt and the Leaf from the cost of a new luxury vehicle down to the average cost of a new mid-end vehicle, it definitely looks like they could make the difference for many individuals considering buying one.
These certainly aren't 0-emission vehicles (grid power isn't 0-emission), but it shifts the economies of efficiencies so that relatively small gains at central facilities can have tremendous trickle down impact. The pressure this will create to shore up infrastructure will drive the creation of local jobs and local expertise in the long run while reducing our reliance on foreign sources of power. Win-win, I'd say.
Why did you think that we pay less than $3/gallon for gas and Europeans pay $7-$8.
As many others have answered, it's because the Europeans distort the market (via taxes) even more than we do. That's not particularly interesting; it's commonly known.
The more interesting question is, now that you know that, whether you'll refrain from using that example again? I suspect you won't, and that you will continue to make that point when you feel it will score you a point in an argument. Many political opinions don't change in response to new information.
Exactly so.
And Oil company profits in the EU are every bit as lucrative as they are in the US.
A high tax burden is not a sign of an absence of subsidy.
Sig Battery depleted. Reverting to safe mode.
"you won't drive down the prices a lot by having a lot of (rich) buyers."
The prices will eventually drop due to competition. There won't BE competition if it isn't profitable to sell cars to early adopters.
One would think the "early adopter pays for the R&D" concept would be easy for Slashdotters to understand. In the PC world, they make developing quickerfasterbetter hardware a reasonable proposition.
"This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
Bottom line, most people are not interested in "green" or "renewable", etc.
Most people are interested in saving money. Even if the car is electric, they still will not save money in terms of the total cost of ownership, over buying a regular old car that's fuel efficient.
Look at things like the Chevy Volt versus a Toyota Corolla. Even assuming no gas, ever, the Corolla is still more affordable.
Once these move beyond luxury and conversation pieces into a real solution that helps the consumer... then they'll be of interest to more than just conspicuous consumers.
" from households making more than $200,000 " - Two earners making a combined $200k in many urban areas where the car will be used are middle class. This might be hard for a writer for Slate to understand given what they pay professional writers at the moment.
Gasoline at least cuts out the middle man, by allowing fairly direct use of the energy of burned fuel.
However small internal combustion engines are horribly inefficiant. Plus they only deliver usable power and efficiancy and can't deliver torque at stall at all so a complex drivetrain is needed to go between the car and the wheels.
IF the electricity is coming from CCGT plants then i'd expect the increased efficiancy of the power plants over an internal combustion engine to make up for the transmission, distribution and storage losses. Coal power plants are less efficiant but coal-oil conversion isn't exactly efficiant either.
The best pursuit out there is that of a hydrogen powered vehicle, that runs with water as it's fuel.
Umm making water into hydrogen would use up more energy than you would get from burning it so it's only worth it if you are storing the hydrogen (essentially using it as a form of battery).
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
They expect us to ride the bus, but they won't provide the fundage. They'll just raise taxes.
And...?
You do understand how funding for public transit works?
You can't tax cut your way to a robust public bus system.
[Fuck Beta]
o0t!
It is the usual and normal pattern in America that the wealthy acquire new devices before the poor. The wealthy guy can take the hit if he makes a bad choice and makes a lousy decision whereas the poor can sink under the waves from a tiny error. As the technology gets more common, is thought of as being reliable and cheap to operate, then expect people with less money to acquire such a product. In essence the wealthy are the guinea pig and after all companies usually seek the big spenders as buyers.
I expect a tipping point in which there will eventually be a stampede of buyers seeking electric cars. Companies that have put them selves in the right position will earn a whole lot of money.
With some research what you will find is that he original Section 179 tax code came about some time in the 1940s, I believe it was updated in the 1970s to include trucks for farmers, in 1996 the maximum amount that could be expensed was increased and finally when SUVs became all the rage and somebody discovered a sneaky way to squeeze personal luxury SUVs through Section 179 if you were a business owner or partner the house and senate came up with the idea of increasing the maximum from $25,000 to $100,000 and Bush signed it into law.
The truth is that most of the luxury SUVs written off as a business expense should have been investigated and prosecuted by the IRS. The linked article clearly does not interview a farmer but instead a health care consultant who obviously does not need an Ford Excursion for his business so it is obviously a personal purchase illegally written off as a business expense.
So no, Bush did not sign the original bill but he was not helping by signing off on the quadrupling of the amount that could be written off. He should have vetoed the entire bill and at the very least keep the write off maximum at previous levels if there was no way to stop the scheming altogether.
You should also add in the resale or trade in value. Trade in value for 2005 Prius in excellent condition is around $11,000 while trade in value of Corolla in excellent condition is around $6,000. So after 5 years, the Prius still holds about $5,000 value over the Corolla which nullifies most of the price difference from the initial purchase. Also, the Prius has held on to more of it's value (30 to 50%) versus the Corolla (15 to 30%).
Just saying, if you want to do a detailed analysis you should include resale cost since most people do use their existing cars as trade ins when they purchase new cars.