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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."
Rebates are stupid. It's the most regressive tax spending possible. If I can afford a large portion of something, I get the rest for free? If I can't afford that much, I get nothing? Um, something is wrong here.
If the government wants to encourage electric cars, why doesn't it buy them? Switch the entire damn postal service over to start with. Give grants for local comunity to switch their police cars and mass transit over.
If corporations are people, aren't stockholders guilty of slavery?
You can retrofit an old Volkswagen bug to be all electric for less than $7000. I don't see what the big push is for the added complexity of a hybrid gasoline/electric engine if you only need one to go more than 60 miles on a trip. Electric vehicles shouldn't be SUV-sized. For the few times you need an SUV or need to go on a long trip, the world's petroleum supply should be enough. It would be nice to see all-electric vehicles for less than $10,000 someday, because the technology is there to do it.
I don't know where they are getting their demographics from, but I have many examples where they are wrong.
My first Prius was purchased around 2003 and was the older model. I was not super high income at the time (100k per year). Cost came in around 26k I think and I was paying $400 per month for it. I would think any car with a price point below 30k is not being marketed to the young and rich.
I sold my first Prius to a gentleman from Southern California who was an appraiser. He most certainly did not seem young or rich either, but needed it for the lower operating costs due to the high mileage he was going to put on it.
Now, I did purchase a Hybrid Highlander with a price tag of around 50k about 3 years afterwards. A luxury purchase to be sure, but once again, I did not represent anywhere near 200k per year in income when I made that decision. I just wanted my SUV back while also reducing my consumption of oil.
In addition to my own personal experiences, I know at least a dozen other hybrid owners personally. With one or two exceptions, none of them are exceeding 200k per year (even with combined incomes).
Just ordinary working professionals. So I would say out of the 15 or so hybrid owners that I know of, maybe 10-15% meet the articles assumptions about hybrid car purchasers, or plug in hybrids.
I realize the article is not talking about hybrids, but pure electric, but the Toyota model is only 35k from what I have heard. Far from a Tesla, or some other luxury hybrid or electric (such as the Hybrid Highlander I owned).
Sounds to me like this article is creating an issue that does not exist to attack "limousine liberalism". I will tell you this... it's about fucking time there was some subsidies for electric/hybrid cars in price ranges below 50k. Unless we just want to forget the nearly $1 billion dollar subsidies for the Hummer?
So I am curious, did Charles Lane have a whining rant to publish in 2002 when Bush signed off on a $30,000 tax credit for monster trucks?
And by that, I mean that when the government offers a $5K rebate on something, whomever is selling that something raises the price by $5K. The consumer doesn't actually get that money. Whenever the government artificially increases the demand for something, the supply artificially shrinks and drives up the price by a corresponding amount.
This is why college costs $35-50K/year now - there's so much cheap government money to pay for it that natural market forces have made it all but impossible to afford except for either the very wealthy or the very poor who qualify for the government money.
Those of us stuck in the middle end up graduating with a "second mortgage."
My first CD writer cost $45,000(!) and came in a rack with its own PC - and the blank disks were $60 each when bought in quantities of at least 100. Clearly this isn't going to catch on.
My first home network connection was a 110 baud acoustic coupler that cost $250. 6 months later I upgraded to a 300 baud modem that cost the same amount. It takes an hour to download a 10KB file from my local BBS. And they call this an improvement?
My first Windows mouse cost $220 including the board that you needed to run it in a PC. Damn, this will NEVER, EVER catch on.
And that double speed NEC CD reader that I bought for $450 was a real bargain.
Oh, and I remember when RAM switched from core to semiconductor memory, and the price came down to a million bucks per megabyte. We thought we were in heaven when our company bought 3 systems with 2 megabytes each.
I can come up with many, many more examples of costs that have dropped incredibly over time. I don't know if electric cars are in that category, but I think there's an excellent chance that they are.
Money spent on R & D is not money wasted. Yes, you have to be certain that there's a real chance of success, but if you wait until that chance is 100% then someone else will have already done it.
I don't know what data Deloitte Consulting was looking at, but I follow market research on EVs as part of my job, and it's not "Young people wealthy people" who are generally determined to be the most likely buyers for electric vehicles. Like with hybrids, it's educated, middle aged, upper-middle class people (EV buyers average slightly younger, but not much). I could conjecture that they primarily looked at the market for Tesla Roadsters to reach their conclusion. But the Tesla Roadster is nothing like, say the Nissan Leaf.
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
Just curious, how much of that was government subsidized? This isn't against your post, but a number of posts above seem to think government subsidies for early-adopters are going to work regarding electric vehicles. Instead I think it's clearly a demand issue. As your post does point out, companies desperately needed storage space and the ability to transfer data from point to point quickly. They were willing to shell out $$$ for the tech to do it. This seems clearly different, as now we're trying to replace an old and established industry with a new one, whereas in your examples, these were emerging technologies from an emerging industry.
How much was earlier US high tech driven by Federal subsidies? Most of it. Who were the early adopters? Bank home offices, process controls at big refineries, and defense/aerospace... lots and lots of defense/aerospace. Even if it was used for commercial aerospace, only by the fat of defense work were Boeing, Bunker Ramo, CDC, Convair, Douglas, HP, Hughes, IBM, Lockheed, Raytheon, TRW, et al, able to fund the purchase and/or development of ever more advanced automated controls, data processing, and networks.
Given how the US economy has been structured since the mid-Depression, I doubt we'd be having this electronic discussion, or even know why we weren't having it, without the Federal intervention that helped get the ball rolling.
It only seems different, this time, because this sort of automotive subsidy isn't driven by a defense or NASA contract.
Luke, help me take this mask off
100 billion every year? have a citation to quote?
here's a counter citation
http://blogs.forbes.com/energysource/2010/04/05/big-oils-tax-bill/
"Yet before you thank Big Oil for financing Uncle Sam's profligacy, get this: Exxon paid none of its 2009 income taxes in the U.S., while Chevron sent the U.S. Treasury just $200 million."
can you supply ANYTHING to back up your claim of 100 billion a year?
every day http://en.wikipedia.org/wiki/Special:Random
"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."
Same could be said about the Prius but look how well they're selling.
2010 Prius MSRP = $22800 to $28070
2010 Corolla MSRP = $15,450 to $20,150
Price difference = $7350 to $7920 = $7635 average
Prius mpg = 51/48 = 49.5 mpg average
Corolla mpg = 26/34 = 30 mpg average
195,000 miles / 49.5mpg x $3 average per gallon = $11,818 dollars
195,000 miles / 30mpg x $3 average per gallon = $19,500 dollars
$19,500 - $11,818 = $7682.
So basically, you'd have to drive 195,000 miles in a Prius to break even compared to the price of a Corolla. Until you surpass 195,000 miles the Corolla would have saved money.
This also doesn't figure the interest you could make on $7,682 while you're driving your Prius to reach 195,000 miles. If it takes 10 years to reach 195,000 miles that $7,682 at 5% interest would be $12,513.17.
In summary, the new Corolla will always be better than the new Prius. Of course this is assuming you're deciding between the two cars comparing gas prices only, not size of vehicle, status, smugness, etc.
my karma will be here long after I'm gone