link Wow. Talk about subsidies for the rich. It's like Obama and the Democrats invented the idea. Or at least brought it to a new extreme.
Do you have a link to a reputable source instead of a partisan think tank? Especially since partisan think tanks tend to lie so often as they're nothing more then political propaganda operations. Lastly, trying to claim the total design costs will be spread around just 6,000 is retarded especially since they've just started production and will remain in production for years. In short: Dumb post is dumb.
If a vehicle is s good viable machine it should not need subsidies, especially not hundreds of thousands per copy.
Point out flaws in the argument and the response is "well, well, I don't like GM so THERE!" You, sir, win the rolleyes award.
It depends on if you're trying to test new technology or not. Toyota didn't make money on Prius until the third generation was rolled out but now it is profitable and they have a big technology lead. So big even companies like BMW are paying Toyota to get access to their hybrid technology. Come to think of it GM didn't make money off of the invention of the automatic transmission until almost a decade after it was released (Oldsmobile produced the first automatic car in 1939). So the lesson is it costs money up front to develop new techs but once they're sorted out they can indeed be profitable. Oh, and anyone who claims it costs tax payers hundreds of thousands per copy is a fucktard. What they've done is taken the whole design and development costs and then divided them by 6000 since that's how many were produced in the first couple of months. The problem is far, far, far more then 6000 will be produced so in the end so, no, they won't end up costing hundreds of thousands. The more of a car is produced the more the design costs get spread out over each car so the costs drop exponentially as production ramps up. GM just started production so anyone who isn't an idiot can see the OP for the retarded hit piece it is. That's not defending GM, that's defending mathematical reality.
Indeed it was in the form of very generous tax deductions. The tax subsidies for the Prius were done by the Bush administration and wasn't designed to be a stimulus as every honest person knows. Instead it was designed to encourage the roll out of a new tech which could boost MPG and thus decrease domestic gas consumption. We can debate if that goal actually happened (though with the number of hybrids being released now it seems it will indeed have a long term impact) but trying to claim it was ever designed to be a stimulus effort is dishonest to the extreme.
There was a tax credit for buying the Prius or any hybrid. Did the govt subsidize the construction of the vehicle and it's components as they are with the Volt or did Toyota invest its own money?
To be fair, from the article: The 250k number is based on a bunch of stuff that isn't likely to actually happen, and even then, the subsidies are meant to save jobs, not directly help out the Volt itself.
If you remember back to the 1990's Clinton had a project which provided cash subsidies to automakers to come up with way to increase gas mileage in cars. It directly subsidized R&D costs for automakers with domestic operations including Toyota so, yes, there is going to be cash subsidies from the government in there as well as huge tax deductions which artificially inflate demand but lower the amount of taxes the government would have been paid. Any way you look at it hybrids cost the government money. They're looking like a pretty decent investment though since they did help to develop a new technology which just about every major automaker in the world is now rolling out. It took about 15 years and lots of subsidies to happen though.
Then you shouldn't have any problem with any kind of government subsidy as long as it "saves jobs". No matter for what purpose or how expensive? Aside from the fact that the article acknowledges $250K as an upper end number right now, the subsidies (pretty high) are still benefting the evil wealthy. Isn't this just another way they aren't paying their fair share?
It's a fucking money pit boondoggle some elitist politician douche canoe decided we should be strongly encouraged to purchase, and the fucking greasy union thugs were more than happy to reap the pay day. I'd say kill it with fire, but the goddamned things burst into flames on their own.
Oh, I'm not defending the Volt or the subsidies. But I'm not going to ignore how the criticisms laid out in the OP are blatantly misleading and based on unrealistic numbers.
I'm ok with subsidies as long as it serves the national interest. If the country is trying to decrease dependence on foreign oil then, yes, increasing fuel efficiency (for homes and cars) is part of that equation. If a country is worried about food security (so that we can produce enough domestically instead of importing it) then farm subsidies make sense in a place like Japan. Now, if the subsidy doesn't support the national interest or have negligible impact then they don't make sense and should be stopped. For instances, on the surface the cash subsidies we give to oil companies sound like they might increase domestic oil production but the reality is they don't; at least not by enough we can measure with accuracy. The reason is when oil is at ~$100 per barrel there is already a huge profit motive due to market forces for oil companies to drill every where they can. The problem is demand for places to drill is larger then the number of actual good fields for them to drill. Subsidizing the industry at that point will increase company profits but it's hard to see how it will result in any actual increased production as the companies already have massive market forces to drill every where it productively can. Thus the subsidies end up just being a waste.
The point is this: this technology is not cost-competitive with existing technologies. It doesn't look like it's going to be anytime soon, either. I couldn't care less if some other car manufacturer has a lead in producing an uneconomical technology. If, by some chance, they do manage to make it economical, then other companies can license from them.
Just like the hybrid the fuel cell will eventually get to a state which is sorted out and profitable but if you want to hurry it along you have to pay for part of the R&D.
I'm not sure why the taxpayer has to pay any of that. If so sure is the result, then certainly investors will come running. I think you're confusing what you'd prefer the future to be and what it will be or makes sense to be. If the result is to be sensible, it must come from honest competition, not a government thumb on the scale.
They don't have to, we could just sit back and wait 50 years for private industry to sort it out (probably some company in China will end up with the technology), or we can try to promote domestic industry. For instance the US didn't want to subsidize the electronics industry in the 50's and 60's so US manufacturers continued using vacuum tubes while the Japanese government subsidized the hell out of transiters so when transiter technology took off in the late 60's to early 70's the Japanese OWNED the electronics industry. That didn't happen by accident or entirely because of market forces; the Japanese government set up subsidies and government policies which promoted that industry. Yes, when you help domestic industry along it can result in huge increases in employment and company profits. Right now all of the Asians are promoting their domestic industries so either we do the same or we accept that they're going to get those jobs and profits while we end up with higher unemployment and an even bigger trade imbalance. That's just reality, I'm sorry it runs counter to your ideology but it doesn't make it any less real.
Find a way to make the foreigners stop cheating and then I will agree we should sit back and let the market work but when everyone else is intervening our choice is either to do the same or let them win. I want those jobs, profits, and technologies to be made here rather then in Asia so I say do what it takes.
Our government should not be in the business of promoting our industry. To do so is to subvert the market to politics. Though I'm quite happy with what the market produces in the vast majority of cases, I'm seldom thrilled with what comes out of Washington. And it isn't a matter of "sorting it out." Electric cars are not economically viable. Period. Full stop. Without subsidies from government, they could never compete on their own. Even with, GM's sold only a few thousand Volts this year (and I can tell you from direct experience that it's a great car, apart from the economics). The solution for one market-skewing intervention isn't another one. Which is wrong. Because what's the ultimate result of one government's putting their thumb on the scale for their homegrown industry? Everyone's soon doing that. Either that, or you get tariffs or other somesuch to try and equalize things. What you wind up with is either fewer goods, or goods that have hidden costs that grossly distort the public's perception of their worth. If it works. And you still use taxpayer money to achieve it. False dichotomy. If foreign companies are pouring money into their domestic industries, it doesn't mean we have to either (1) suffer or (2) do likewise. We have options, and ones that are compatible with an efficient market.
Your own article says the 250k figure is only accurate if every subsidy is fully realized, right after saying it's not likely every subsidy will be fully realized.
Facts. Some people don't care about them as long as it fits how they feel. As you said many, if not most, of the subsidies will never actually happen while the total number of cars built will far, far, far exceed the 6,000 built in the first two months of production. As the total cost of R&D gets spread out by more units the cost per unit goes down since R&D costs are divided by total number of units to get the per unit cost. In other words, the whole thing is a crock of shit and even Ward knows it but he's too stubborn to admit he's wrong.
Bullshit. It's not companies (especially not in China) but the GOVERNMENT which is pouring money into these things. They're subsidizing them with cash subsidies, they're giving the companies zero percent interest loans, they're giving them heavily subsidized loans from state owned banks, they're having the state purchase these cars/technologies to get production volumes up, and they're protecting their market with a 50% trade tariff so the home companies (most of which are either wholly state owned or partially state owned, Chery is the only private one and even they mostly steal designs by making knock offs of foreign cars right down to every bolt) have the home market all to themselves. Not to mention the state manupulates the currency to make it artificially low against the dollar, Euro, & Yen in order to goose export sales. If you think this is the free market working then you are on crack. You're saying we should disarm and tell our manufacturers to try to compete against all of that. Of course they will fail because the deck is stacked against them. If we want to compete we have to resort to the same tactics or find a way to force them to stop cheating. You're idolized free market only exists in your head and not in the real world.
