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GM Ups Chevy Volt Incentives as Demand Wanes
NLPC ^ | June 10, 2013 | Mark Modica

Posted on 06/10/2013 8:46:48 AM PDT by jazusamo

General Motors has announced a $4,000 rebate (or $3,000 and a four year, zero interest loan from government-owned Ally Financial) on the slow-selling Chevy Volt. The company had a choice regarding how to deal with an excess supply of Volts that is growing faster than demand. GM could have, once again, temporarily halted production until inventory (currently at about a 6 month supply) came down to reasonable levels. It instead chooses to lose more millions of dollars by spending on incentives designed to manufacture demand that otherwise is practically nonexistent.

The much-hyped Chevy Volt was originally presented by GM as a green wonder-car that would be a savior for the company with sales expected in the 10,000 per month range by now. Almost three years after first hitting showrooms, the Volt now sees sales stabilizing at a dismal rate of approximately 1,500 per month. That's roughly one Volt every two months for each Chevy dealership.

Sales for the Volt peaked closer to a 3,000 per month range when GM last upped incentives and admitted that it was "creating market" because "There is no plug-in market." The cost to "create market" per month for the Volt, assuming an additional 1,500 vehicles sell (3,000 total) as a result of a $4,000 incentive, would be $12 million. Considering that about 1,500 Volt fans would have purchased the car anyway, the marginal difference would mean that the additional 1,500 sales come at an extra cost of approximately $8,000 per extra vehicle sold; assuming GM can get sales closer to the 3,000 mark.

The dire sales situation for the Volt points to just how inefficient the plug-in technology is. Consider that the car already gets a $7,500 federal tax credit which goes to the wealthy purchasers. Add another couple of thousand dollars for typical state subsidies. Now another $4,000 incentive from GM and we have a giveaway of close to $14,000 to sell each Volt! Worst of all, GM refuses to admit that the car is anything but a roaring success!

Adding insult to injury, much of the taxpayer-supplied subsidies for the Volt will go towards leases (also supplied by government-owned Ally Financial) that put drivers on the road for as short a period as two years. I have previously calculated that taxpayers are paying about $10 per each gallon of gas saved in these scenarios. The non-partisan Congressional Budget Office has reported that overall plug-in electric car subsidies are estimated to cost taxpayers about $7.5 billion over the next few years for little or no benefit.

$14,000 of incentives on a Chevy Volt and GM still does not seem to be able to sell more than about one tenth the amount of Toyota Camrys that sell in a month. GM and its shareholders lose money, as do taxpayers. Maybe it is time for GM to stop the farce and cut losses for those that are footing the bill to push a green agenda that centers on plug-in electric cars that can not succeed without massive subsidization.

Perhaps electric cars will one day have the technology to be a viable alternative to gas-powered vehicles without billions of dollars of taxpayer-funded handouts. That time is not yet here. While the technology is being improved, there is no need for GM to continue to try and fool the public that demand exists for the Volt where it does not.

It is past time for GM to come clean on the limitations of the Chevy Volt, instead of wasting millions of dollars to artificially manufacture demand to try and prove that the car is a success. The idea of coming up with a viable technology to lessen the consumption of fossil fuels is a good one. Let's just do it in a more logical manner without the misrepresentations and wanton wasting of taxpayer money. It would have been a refreshing change if GM had finally chosen to admit that demand is lacking for the Chevy Volt. The time for such honesty at GM has obviously not yet come and all taxpayers will continue to pay the price as they remain on the hook for the subsidies that are required to keep the Chevy Volt farce alive.

Mark Modica is an NLPC Associate Fellow.


TOPICS: Business/Economy; Government
KEYWORDS: bailout; chevyvolt; efv; electriccars; gm; subsidies
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To: jazusamo

Do they smell? The worst smell in the world when driving is to get behind a fricking diesel car in rush hour traffic.....even at max highway speed...


21 posted on 06/10/2013 9:11:20 AM PDT by Gaffer
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To: jazusamo
Yep, the clean diesel powered cars are coming to the USA.

Then diesel fuel will probably go to $5.00/gal.

22 posted on 06/10/2013 9:11:38 AM PDT by Alaska Wolf (I)
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To: RayChuang88

I’m waiting for a small compact truck with a diesel engine.

Mahindra was mumbling about bringing one to America. I don’t think it has happened yet.


23 posted on 06/10/2013 9:12:39 AM PDT by listenhillary (Courts, law enforcement, roads and national defense should be the extent of government)
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To: Gaffer

I don’t know for certain but supposedly the sulfur is removed so that alone should greatly lessen or remove that diesel odor.


24 posted on 06/10/2013 9:15:42 AM PDT by jazusamo ("Mercy to the guilty is cruelty to the innocent." -- Adam Smith)
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To: Alaska Wolf

You’re probably right, of course regular gas is right at $4.00 a gallon now her in WA.


25 posted on 06/10/2013 9:17:51 AM PDT by jazusamo ("Mercy to the guilty is cruelty to the innocent." -- Adam Smith)
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To: jazusamo

It’s a piece of crap car designed and peddled by the government. Want an electric? Go get a Tesla.


26 posted on 06/10/2013 9:18:15 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: listenhillary

Mahindra doesn’t want to meet US safety and emissions standards.

Better bet is the VW Amarok. A little smaller than a Ford Ranger, 2.0 liter turbo diesel. Real possibility ofit coming here.


27 posted on 06/10/2013 9:21:47 AM PDT by jjotto ("Ya could look it up!")
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To: jazusamo

Only $3.93 here. In the Yukon it is $1.58 a liter.


28 posted on 06/10/2013 9:23:39 AM PDT by Alaska Wolf (I)
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To: Jeff Head
A 2013 Honda Civic Hybrid gets 44 MPG and costs $25K, ten thousand less than the Chevy VOLT and without all the incentives. Sorry Government Motors...no dice.

If anyone is looking for a new car, look at the Ford Fusion Hybrid. MSRP = $29,700; 47/47 rated MPG. I can vouch for the great MPG. If you learn how to drive a hybrid, you can get phenominal mileage. That said, even without the great mileage, the Fusion is an awesome car. You probably won't find a 2013 on a lot. I ordered one - it took 7 weeks for deliver, and was worth the wait.

29 posted on 06/10/2013 9:24:00 AM PDT by Go Gordon (Barack McGreevey Obama)
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To: Wyatt's Torch

Yep, the Tesla is a looker and from what I’ve read is a real performer.

My son works with a guy who just bought an S Model, it was right at $90K and I can tell you I won’t be looking to buy one.

He told my son it’ll go 300 miles on a charge but I’ve read in reality it’s about 200 which still means you’re limited if you want to go any distance.

In fairness I guess anyone who can afford one can afford a second nice vehicle for longer runs.


30 posted on 06/10/2013 9:27:28 AM PDT by jazusamo ("Mercy to the guilty is cruelty to the innocent." -- Adam Smith)
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To: listenhillary

They go after jeeps as fire threats and these fire bombs they pay us to take.


31 posted on 06/10/2013 9:30:05 AM PDT by Average Al ( Our founder fathers never knew we could fail due to a Techtatorship.)
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To: Go Gordon

Exactly. I have friends who have the Fusion and swear by it.

And Ford did not take all of the bailout money.

I have to have a 4 wheel drive pickup, so the high milage is not an issue I seek to address.

I will say, that when the government bought into GM like they did, I imemdiately sold my newer 2004 Chevy 4x4 crew cab pickup and went out and got a 2007 Ford 4x4 crew cab and never looked back.

It’s resale was not as good as the Chevy at the time (though that is improving) but I usually keep them long enough where that is not an issue anyway. And, the newer model Fords, Chevys, Dodges, etc. all do about as well as the others in the performance areas if you buy what you need.


32 posted on 06/10/2013 9:41:27 AM PDT by Jeff Head
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To: jazusamo

Anyone with that $100k-range to spend on a car can get any number of models from any number of manufacturers that compare favorably to a Tesla.

Like most $100k cars, it’s a rich man’s toy.


33 posted on 06/10/2013 9:46:15 AM PDT by jjotto ("Ya could look it up!")
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To: jazusamo

Demand wanes? How could they tell?


34 posted on 06/10/2013 9:53:51 AM PDT by wbill
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To: jazusamo

Gorgeous car. Range will be an issue with any battery powered car until there is a technological breakthrough. TSLA is building the recharge stations between major cities that will recharge within 30 minutes while you grab a bite to eat. Personally I wouldn’t take a long drive in one. My wife has a big SUV for that. 99% of my driving is < 50 miles per day. Then again I don’t have a spare $100 large :-)


35 posted on 06/10/2013 9:54:25 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: jazusamo

Even free, I would not accept a Volt or any other GM car. I am boycotting that corrupt company forever because of the shocking bankruptcy in which they violated bankruptcy law, contract law, and centuries of common law to reward the UAW and other connected insiders as the bondholders and others were stiffed. I do not deal with crooks, and the “new” GM is particularly crooked. As an added bonus, the Volt is such a trashy car that I’m not losing out by refusing to deal with them. GM’s offerings are pathetic.

GM is dead to me - permanently.


36 posted on 06/10/2013 10:35:46 AM PDT by Pollster1 ("Shall not be infringed" is unambiguous.)
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To: jazusamo

The Chevy Volt is becoming the Ford Pinto Hatchback of this generation. I remember the ‘explodes on impact’ bumper sticker jokes pertaining to Pintos.


37 posted on 06/10/2013 1:26:15 PM PDT by RobertClark (My shrink just killed himself - he blamed me in his note!)
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To: RobertClark

I remember the Pinto Hatchback well, I owned one for several years but luckily survived it. :-)


38 posted on 06/10/2013 1:33:43 PM PDT by jazusamo ("Mercy to the guilty is cruelty to the innocent." -- Adam Smith)
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To: jazusamo

Be sure to cross one or two off of your nine lives list. LOL


39 posted on 06/10/2013 1:35:31 PM PDT by RobertClark (My shrink just killed himself - he blamed me in his note!)
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To: RobertClark

LOL! It was a good day when I got rid of it.


40 posted on 06/10/2013 1:36:58 PM PDT by jazusamo ("Mercy to the guilty is cruelty to the innocent." -- Adam Smith)
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