Thursday, July 29, 2010

Get Ready To Pay For Your Neighbor's Chevy Volt!

Ah, "Government Motors" in action. Or should I say, socialism in action, in all of its facets. The unveiling of the Chevy Volt, and it's price tag, is a textbooks study in why socialism is an economic clusterf*ck.

First, the price:

The president has bludgeoned state-owned GM to put out a plug-in hybrid vehicle that is, according to the Post, more than twice as expensive as a comparable gasoline-driven car...

Sticker price: $41,000. [Average American's] Per capita income: $39,138.

It is consumer demand and competition that brings down the price of goods and makes them affordable to everybody. When government dictates demand, you get a high-Volt sticker shock....

Who's gonna pay that? Why, you will, of course, whether you own one or not:

To entice motorists to buy these untested contraptions, the government will give each one a $7,500 subsidy, and another grand if they install their own charger at home (apartment owners of course, are out of luck, and get to subsidize homeowners with this one). President Obama wants a million electric cars on the road by 2015, and since vast cost-saving advances are unlikely to occur so quickly, it’s safe to assume the subsidy would remain, sucking only $8.5 billion dollars out of taxpayers coffers to subsidize people willing to buy a more expensive car than they actually need.

Yes, your tax dollars will pay for your neighbor's car. It's called "spreading the wealth". And since - like cash for clunkers - there will be many unwilling to resist a handout, we'll likely need more money that has been set aside. Not to mention the cost of charging them:

IBM’s vice president for energy and utilities, Allan Schurr, estimates that 80 percent of vehicles aren’t parked in the garage of the person who owns them, which means there are going to have to be a lot of public charging stations built at taxpayer expense.

Do you want to know why consumers will never buy the Volt unless either bribed to do so by your dollars or forced to do so by government compulsion? Check it out:

Lets do some math:
Chevy Volt: $41,000 (True Cost)

Honda Civic: $20,000 (Average build)
Difference: $21,000

Gas: $2.45/gal (in Oklahoma City)
The difference in price would buy 8,571.43 gallons of gas.
The Civic gets an average of 29 miles to the gallon. That’s 248,581.47 miles on the price difference.
Assuming the average driver drives 12,000 miles a year, AND you only drive the Volt on the 40 mile range of it’s battery, using no gas, you’d have to own the Volt for 20.7 years to justify the price difference in gas savings.

How long’s that warranty again?

I did a similar comparison a while back, comparing hybrid vehicles with their gasoline-only equivalent:

Ford Escape (standard) 22 MPG City/28 MPG Highway MSRP $20,435-
Ford Escape (hybrid) 34 MPG City/31 MPG Highway MSRP $29,645-

Lets go with a baseline figure of 12,000 miles a year (1K/month, like a standard lease) to figure out the "savings". And we'll will take the higher spread of City miles (12 MPG better w/hybrid) to do the math.

12000 miles at 22 MPG = 545 gallons consumed/year
12000 miles at 31 MPG = 353 gallons consumed/
Hybrid advantage - 192 gallons less/year

Great! So how much do we save? Gas in New Jersey is now $1.81 for 87 octane, let's use $2- as a figure here. How much money to we save a year using a hybrid?

192 x 2 = $384 saved

And the time it would take to recoup the extra $9,000 you spent to get a hybrid?

$384/$9,000 = 23 years

Let's assume the price of gas goes up to $3-/gallon, a 50% increase from today:

192 x 3 =$576 saved
$576/$9,000 = 15-16 years

...speaking of ideological product, there is one way you can make the initial cost of hybrids more appealing - by taxing the sh*t out of gasoline:

192 x $6 = $1,152- saved/yr
$1,152/$9000 = 7.5 years.

Another added bonus: Should gasoline usage actually decline due to extensive hybrid/electric car use, and tax revenue from per-gallon pump sales decline, you can bet your gas on getting socked with a per-mile tax...

So stand back and watch as your neighbor gets out of his previously defaulted house - mortgage covered by taxpayers - and into his brand-new Chevy Volt - paid for in part by you.

So, Hope and Changers - how's that socialism working out for you?

1 comment:

Anonymous said...

Thank you for the outstanding analysis. I will continue to drive my pre govt motors Suburban @ 16mpg, and be safe to boot. There is no sanity in the current administration.