Electric Car Subsidies As Handouts For the Rich 589
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."
This is why I'm never a fan of 'rebates'. (Score:5, Interesting)
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.
Electric cars work if they're small (Score:4, Interesting)
You can retrofit an old Volkswagen bug to be all electric for less than $7000 [e-volks.com]. 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.
Not to sure about that.... (Score:5, Interesting)
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?
They said the same about hybrids (Score:1, Interesting)
This speculative bullcrap will be put to bed a week after sales start. There is so much pent-up demand for ditching gas, this will all seem like nothing more than desperate Chevron/Exxon/Conoco/BP propaganda.
But the Chinese BYD F3DM [3.ly] will eat the Volt's lunch, costing half as much with a longer all-electric range and batteries which can charge half full in 10 minutes if your house mains can handle the current.
The real tragedy is overpriced sports card like the Tesla which unlike the Volt, are actually priced beyond most consumers' means.
We tried this in Europe (Score:1, Interesting)
Each country tailored the rules so that people would buy as many indigenous cars as possible. And yes, the customers are upper middle income and above.
It is a "please buy indigenous cars-and-congratulations to you -- you're above upper middle income-subsidy", not a green car-subsidy.
Re:Handouts for rich LIBERALS (Score:2, Interesting)
1. The Prius is more expensive
2. Only liberals drive Prius
Can you provide a source to either claim? I'm sure I could point out the flaws that lead to those conclusions, but you have to provide a link.
Otherwise, you're just trolling. Lame.
Re:Electric cars work if they're small (Score:4, Interesting)
Where were the whiners? (Score:5, Interesting)
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? [usatoday.com]
Re:This is why I'm never a fan of 'rebates'. (Score:2, Interesting)
What if you make a law that says:
"The government will buy X number of clean cars for a total of Y dollars from the first maker that can deliver such cars at rate Z.
The government will also buy cars from any subsequent makers that meet certain harsher requirements."
Now, Foobar Ink has to make cars that they can sell for Y/X dollars per vehicle. If someone beats them to that they have to improve their design and lower their prices until they have a good enough deal.
Price of hybrids includes rebates (Score:4, Interesting)
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."
Re:'limousine liberalism' (Score:5, Interesting)
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.
Not the op, but some figures (Score:3, Interesting)
Darn it all, I created a spreadsheet once where I could just punch the figures in and it even did cost of capital calcs, maintenance savings, etc...
Prius is more expensive - $23 - 28k; 51/48 mpg. Call it 50mpg.
Mazda3 4 door - $15k, 29mpg average city/highway
Fiesta - $13k, 34 mpg average
Going by a rather high 15k miles a year, and $4/gallon gasoline(I'm being nice to the hybrid)
Prius - 300 gallons/year, $1200 fuel cost a year.
Mazda3 - 517 gallons, $2069 fuel, $869 more than the Prius
Fiesta - 441, $1765, $565 more than the Prius
Assuming the Cars last 10 years, that's a combined fuel cost of 2.4k/year for the Prius, $1.7k for the Mazda3, $1.5k for the Fiesta.
As for the 'only liberals driving them', I won't go that far, merely stating that you get mostly those who are obsessed with 'green' or those lured by some combination of subsidies, unusual driving patterns excessively canted towards hybrid styles(inner city cab driver?), etc...
Or I could say 'those bad at math'.
Re:This is why I'm never a fan of 'rebates'. (Score:3, Interesting)
There, corrected that for you.
Re:Yeah... (Score:5, Interesting)
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.
Re:'limousine liberalism' (Score:5, Interesting)
Re:'limousine liberalism' (Score:2, Interesting)
Re:'limousine liberalism' (Score:2, Interesting)
>>>Electric cars would make economic sense in a truly free market
Except for that annoying 200 mile range. I often travel long distance, not just for my job but also to visit friends, families, or nearby cities. An EV simply wouldn't work for me. ----- This reminds me of Betamax where everyone blamed all kinds of reasons why it failed - but few ever mention that it had a 1 hour limit on tapes. THAT was the real reason it failed. Not practical for most consumers. Neither are EVs.
Now I know a lot of EV fans say have two cars - electric and gasoline. But who can afford that? For that matter who can afford the required 100,000 mile replacement of the batteries, which is as expensive as buying a whole new engine. Make economic sense? Hardly. Nor practical sense.
To me a better solution would be to stick with the cars we have now, which has proven to be effective and flexible, but with better fuel economy like the 90 mpg 5-seat Volkswagen Lupo, or the 250 mpg 2-seat commuter car due to be released this fall. And then gradually transition over from fossil fuels to Solar fuels like ethanol and biodiesel.
The Federal Tech Driver (Score:5, Interesting)
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.
Re:This is just stupid (Score:2, Interesting)
Submitter here. Summary is incomplete, misleading. (Score:2, Interesting)
When I submitted the article, the summary included the following:
Put simply, the is no large market for production of all-electric cars to scale up to, because all-electric vehicles do not - and likely will not - meet the needs of the vast majority car buyers. Because the subsidy will not stimulate widespread demand, and because early adopters are likely to be affluent, it is misguided.
Re:Saving irreplaceable fossil fuel? (Score:3, Interesting)
So, were not burning any fossil fuels to charge these things?
Irrelevant. The point is not to burn zero fossil fuels (an impossible goal at this point, unless you can go by bike). The point is to burn less fossil fuels, and also add flexibility to the nation's fleet. Just because an electric car uses fossil-based electricity today doesn't mean it can't use renewable electricity tomorrow.
And most Americans have really long commutes, more than 50 miles per day.
Wrong [go.com]. The average commute is 16 miles each way. A modern electric car (like the Nissan Leaf) can go 100 miles on a charge. Not a problem for commuting.
Citation request? (Score:4, Interesting)
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/ [forbes.com]
"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?
Re:Price of hybrids includes rebates (Score:4, Interesting)
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.
...and then someone else who also sells it raises their price by only $4k and steals all the customers [wikipedia.org].
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.
The one I went to looks like it's only risen to $30k (UIUC, out-of-state for the college of engineering). But this involves more than just student aid, there's also the changing cultural expectations where a bachelor degree is required for pretty much everything. And there are more non-traditional / online universities springing up (increasing competition that'll bring the price back down), and some seem to be becoming actually decent.
Re:'limousine liberalism' (Score:2, Interesting)
baloney (Score:2, Interesting)
I don't want to play the conspiracy nut, but there's a lot of disinformation out there regarding electric vehicles, which have the oil companies AND their own makers against them (the traditional automakers are afraid of losing all the $$$ they make in parts & repairs.) The report is full of nonsense--we have loads of Prius owners here in a very blue-collar community. My old Mazda has a few years left, and I hope that I can replace it with an electric car.
Re:Yeah... (Score:3, Interesting)
I wonder how the TCO looks on the leaf if I take a 7500 federal credit, and a 5000 CA credit, and resell the car for more than I bought it for.
Who says what again? (Score:2, Interesting)
Where are you getting this viewpoint from? The average US commute is something like 33-34 miles round trip. A 50-100 mile range electric vehicle would suit those needs just swell, with the added bonus of not concentrating massive amounts of pollution in urban heat trap zones.
Heck, I live out in the sticks, my round trip to town is 26 to 30 miles depending on what stores I need to hit. A 50 mile range light weight small pickup would suit 99% of my needs *right now*, and we have mid range flatbeds and dumptrucks and even some road tractors if I need a bigger truck for the occasional heavy load. Most of the time I get by with a four cylinder diesel datsun pickup 1/2 ton that gets 30-40 MPG.
And with my solar panels, once there are pure electric vehicles beyond sedans, and only needing to travel into town once a week...free fuel for me. I'll wait a few years after I start seeing them, then get a used one. Around the farm, no probs, it's 1.5 miles wide at the widest, meaning I can scoot around here for cheap/free as well (we have a lot of our own gravel roads). Electric works just fine in industry now, plenty of useful and practical all electric vehicles, from forklifts to mining equipment. Smallish electric cars have been used since forever in the form of golf carts. It's the same tech, just scaled up to make a road vehicle.
The prius sold out fast when it was first introduced and still sells well, despite all the naysayers pre release-and I distinctly remember a lot of internet predictions saying 'they wouldn't sell". The tesla at the other end, sells all they make.
I'll make a prediction to counter your opinion..both the nissan leaf (pure electric, mid $20ks) and the chevy volt (extended range plug in hybrid, 41 grand) and the tesla model S sedan (fifty something grand) will sell every single one they first release, and will then have to increase production to meet demand. And then a few years from now the chinese electrics (BYD company at first) will finally hit, and they will come in under 20 grand and sell like freekin mad, and *that* will be when the electric vehicle dam bursts, and you will see them at all price ranges from cheap intro level "your basic ride" to luxury exotic and everything in between, just like today with pure ICE vehicles.
We'll have to wait to see who is correct of course.
Really? (Score:2, Interesting)
Sadly, even Slashdot has succumbed to the hate politics so prevalent in the US at the moment. Watching the commentary on this story is as intellectually enlightening as watching the mainstream media with talking heads and rants. What happened - you guys get bought by Fox?
Re:Not to sure about that.... (Score:3, Interesting)
What are you talking about?
Firstly, the less than symbol was stripped from my post. I was not making anywhere near 100k in 2003, but closer to median income, from the other side.
Secondly, the article wants to decry limousine liberalism and I am just pointing out that it is well known that the subsidies given to the Hummer (not the military model, but the civilian model) approached $1 billion dollars in cost to the government. It may have ended up being more.
In fact, you can do a little searching if you want, but you could have received an approx. $80k tax break on a Hummer while the Prius enjoyed a only a $2k dollar tax break.
I understand my missing less than symbol throwing you off (I would still think the rest of it in context would have tipped you off), but what does the military have to do with this?
In fact if you read my post carefully at all, so much of it in context would have cleared up your misunderstanding.
Re:Economies of scale have already been achieved. (Score:3, Interesting)
What it'll do is help drive research. It'd be silly to think we have developed the best system for hybrid cars as it is. They are just simple setups with a gas engine and batteries. There are probably much better ways of doing it. Well, one way to help get that researched is to help the things sell. If it is a profitable market, a new market, companies will work on it. Subsidies can help push that.
I mean you have to consider that in the development stage, hybrids are like Model Ns or maybe Model Ts. They are very much in their infancy. Now look at how far pure gas powered cars have come in that time till now. Given time, hybrids should too.
While I'll grant you current battery technology is pretty much maxed out, this will generate demand for new tech, with performance better suited for cars. For example in terms of batteries we aren't looking for the same thing as in, say, a laptop where energy density is king and the entire solution has to be tiny. What we need is low cost, and not too much weight. We could have something that is larger and more complex. Fuel cells maybe. Right now too expensive, but then not much has been developed with them. Also maybe research progresses along using multiple storage techs. Have something like fuel cells for sustained cruise, but super capacitors to overcome inertia and get the car going.
It's a new problem, and I don't know what the solution is going to be. However, I think there probably is one. We are real good with technology and to think we've already discovered everything in any area is pretty arrogant. I think it is the sort of thing we can solve, but to do so will take development. Something that'll help that is making the cars more marketable. If the companies can sell what they make, there's incentive to invest in new tech.
Re:Yeah... (Score:5, Interesting)
Same could be said about the Prius but look how well they're selling.
2010 Prius MSRP = $22800 to $28070 [yahoo.com]
2010 Corolla MSRP = $15,450 to $20,150 [yahoo.com]
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. [moneychimp.com]
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.
Re:Handouts for rich JEWS (Score:3, Interesting)
And this is the typical "liberal" tactic of throwing a red-herring into the argument by saying "racist" instead of having a REAL discussion using facts and figures.
I live in the Bay area - one of the hightest concentrations of liberal folks in the country - I suspect the original author's points are correct.
1) We're subsidizing this technology with everyone's funds so a few people can buy them and feel good about themselves.
2) They are STILL not economically viable compared to conventional technology.
The facts are that the electric car has been around as long as the combustion engine. They haven't been competitive from an engineering perspective for that entire length of time. Their inherent weekness - charge time, and cost (both to purchase and own - wait till you get to replace that $6K battery stack.) make them uncompetitive in the market.
Leave the race baiting out it.