Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

'Green' boom turned to bust for local vehicle maker
News-Sentinel ^ | April 21, 2012 | Kevin Leininger

Posted on 04/21/2012 12:20:54 PM PDT by jazusamo

Government freebies can't overcome limits of market, technology

Way back in 1993 I wrote an editorial about President Bill Clinton's efforts to promote electric cars headlined, “If government designs ‘green car,' you'll drive it.”

Nearly 20 years later, Government Motors' Chevy Volt has proven me wrong – possibly because, as The New York Times recently pointed out, it could take more than 26 years for the car's fuel savings to justify its price compared to a similar gas-only model. Volt sales have been so anemic that GM recently halted production for five weeks, resulting in 1,300 layoffs.

On the other hand, my thesis has proven true in reverse: If the government doesn't pay people to make or buy green cars, they probably won't.

Just as Jerry Medlin.

Four years ago, the future appeared bright indeed for Medlin and his company, EVI – Electric Vehicles Inc. Gas prices were soaring, Medlin had purchased the assets of a Missouri rival and the city had just awarded $100,000 no-interest loan to help EVI produce “golf cart”-style vehicles at his plant off Engle Road. “This will further the recognition of Fort Wayne as a hub for the electric vehicle industry,” Mayor Tom Henry gushed.

The following year, when the federal government authorized a $5,936 tax credit for anybody buying an EVI vehicle, hundreds of orders poured in and Medlin spent thousands of dollars on equipment and hired about 30 people to meet the expected demand.

Then the Obama administration abruptly rescinded the buyers' incentive for EVI and similar companies – and Medlin went from boom to bust virtually overnight.

Volt owners, meanwhile – few as they are – remain eligible for a $7,500 credit from the very government that remains part owner in the company that produces it.

“I used to sell to General Motors, and nobody ever bailed me out. That's the way it's supposed to work,” Medlin said. “I'm not picking on Obama, but the government shouldn't be picking who wins and loses. Look at Solyndra (a solar-panel company that went broke despite $535 million from Washington). This is just another example of the government thinking it knows more than anybody else.”

Medlin most definitely has not given up on alternative energy and vehicles powered by it. But his self-professed excitement about the industry's potential is tempered by the kind of realism too often missing from a debate in which self-congratulatory emotion and good intentions are too often deemed more important than tangible results.

“The point where a (“green”) car can actually go after a mass-market audience is when pricing starts making sense on paper,” said Jesse Toprak, vice president for market intelligence for TrueCar.com, which compiled data for the Times' analysis. Some buyers never do the math and others believe green cars will have higher resale value, the Times noted, while others willingly pay a premium in order to help the environment, feel better about themselves or to be admired by others.

“Can we build an ‘urban' car you just drive to and from work for less than $30,000? Yes, we have the technology,” Medlin said. But such a vehicle, he added, would have to be the latter-day equivalent of Ford's Model T: very basic transportation. No frills, few consumer choices.

There is, right now, little market for such a contraption – which is why the car companies are making much more expensive and complex vehicles that must rely on taxpayer-funded bribes, dubious science and other gimmicks to justify what the market alone cannot. Did I mention that the Volt on a local dealer's lot priced at $43,175 had a sticker on the window boasting a perfect “10” on its “global warming score”?

Whatever happened to buying a car because it was fun to drive or might get you a date?

Medlin is no doubt right to be optimistic about the long-term future of green vehicles. Eventually, some of the technical challenges – the cost, range and lifespan of batteries, for example – will be overcome, expanding the pool of potential buyers and driving down costs.

The price of fuel could change the equation, too, although the Times notes that gas would have to cost $8 a gallon before many of the cars in its survey would pay for themselves within the six years an average person owns a car.

And so I'll continue to drive my seven-year-old Pontiac with a clear conscience, even though I spend more on gas than I'd like. The Earth may indeed be a finite precious resource, but so is my paycheck.

In other words, when driving a “green” car makes sense, I and millions of others will gladly do it.

In the meantime, the bureaucrats who have repeatedly proven they really don't know more than everybody else should stop wasting our money on stuff few people want to buy.


TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: electricvehicles; greenenergy; subsidies; taxcredit
A common sense article on electric vehicles and government subsidies.
1 posted on 04/21/2012 12:21:01 PM PDT by jazusamo
[ Post Reply | Private Reply | View Replies]

To: jazusamo

It should be illegal for the buffoons on Capitol Hill to subsidize this crap with taxpayer dollars. If people want to drive Chevy Volts, LET THEM PAY FOR THEM. It’s not the job of the taxpayers to buy “green” vehicles for environmentalist wackos.


2 posted on 04/21/2012 12:25:10 PM PDT by FlingWingFlyer (It's time for the 47% to start paying their "fair share" of income taxes.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: FlingWingFlyer

Well said. Let the market decide the value of purchasing an electric vehicle, not taxpayer dollars that subsidize the wealthy who can already afford these vehicles. Many taxpayers cannot afford to buy these vehicles themselves but subsidize others, it’s not right.


3 posted on 04/21/2012 12:29:24 PM PDT by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
[ Post Reply | Private Reply | To 2 | View Replies]

Please bump the Freepathon or click above and donate or become a monthly donor!

4 posted on 04/21/2012 12:31:36 PM PDT by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
[ Post Reply | Private Reply | To 3 | View Replies]

To: jazusamo

Technology advances are being made every day. Thus, there’s no doubt in my mind that some day cars like the Chevy Volt will be commonplace.

In the meantime the government should back off and let private industry do what it does best: innovate.


5 posted on 04/21/2012 12:37:38 PM PDT by upchuck (Need is not an acceptable lifestyle choice; dependent is not a career. ~ Dr. Tim Nerenz)
[ Post Reply | Private Reply | To 1 | View Replies]

To: upchuck

Fully agree...Improved technology will come and one day they’ll be viable without subsidies but they aren’t now.


6 posted on 04/21/2012 12:42:17 PM PDT by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
[ Post Reply | Private Reply | To 5 | View Replies]

To: jazusamo

My brief word on cars based on my experience. I live in the United States. It is a large country. My relatives live hundred of miles away. I want to load my wife, my dog, my luggage (and at one time my kids) in my car and drive there. I don’t want to take a train, a bus, a plane, a canal barge or any other means of transportation. I want to get there in a reasonable amount of time traveling over mountains and over various road types. This implies size, power, comfort, economy, and safety. Based on experience a 300 hp engine and 20+ mpg will be adequate.

Next there is the weather. We have four seasons. The car has to be able to travel in heavy rains, at night, and during heavy snows. One has to assume that you will meet some condicions that far exceed the ordinary. Your vehicle must get you through safely. Many cars on the market today fall short of these basic requirements. A reasonable baseline for vehicles, IMHO, was American cars produced in the late 60ies. Although not perfect, they reflect many of the factors that Americans require in automobiles.


7 posted on 04/21/2012 12:48:42 PM PDT by Citizen Tom Paine (An old sailor sends)
[ Post Reply | Private Reply | To 1 | View Replies]

To: jazusamo

That perfect 10 for global warming has to ignore the fact that the electricity to charge it was generated with coal; an “inconvenient truth”.


8 posted on 04/21/2012 3:38:25 PM PDT by IAGeezer912 (Carpe Diem, Per Diem, Doris Diem)
[ Post Reply | Private Reply | To 1 | View Replies]

To: jazusamo

That perfect 10 for global warming has to ignore the fact that the electricity to charge it was generated with coal; an “inconvenient truth”.


9 posted on 04/21/2012 3:38:28 PM PDT by IAGeezer912 (Carpe Diem, Per Diem, Doris Diem)
[ Post Reply | Private Reply | To 1 | View Replies]

To: IAGeezer912

Yep, of course that’s Government Motors advertising and considering everything else they’ve been saying, and not saying, about the Volt for the last year or more that’s just a little fib. :-)


10 posted on 04/21/2012 3:46:16 PM PDT by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Citizen Tom Paine

I hear you and also miss those cars of the 60’s and 70’s, many offered comfort, horse power and a reasonable amount of safety.


11 posted on 04/21/2012 3:49:56 PM PDT by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
[ Post Reply | Private Reply | To 7 | View Replies]

To: upchuck

“Technology advances are being made every day. Thus, there’s no doubt in my mind that some day cars like the Chevy Volt will be commonplace.”

Maybe you had better take a look at the other end of the plug! If everyone had an EV today, we would suffer a national blackout when everyone plugged in after work! Then there’s the energy conversion losses getting the power to charge up your “golf cart.” and the fact that the battery useful life and replacement costs make these present-day vehicles completely uneconomical. You may “feel good” that there isn’t and IC engine under the hood, but you are polluting nonetheless, particularly if you get your electricity from a coal-fired plant. Just saying.


12 posted on 04/21/2012 5:52:33 PM PDT by vette6387
[ Post Reply | Private Reply | To 5 | View Replies]

To: jazusamo

bump


13 posted on 04/21/2012 7:30:51 PM PDT by gibsosa
[ Post Reply | Private Reply | To 1 | View Replies]

To: vette6387

Volts have an IC generator under the hood.


14 posted on 04/22/2012 5:51:55 PM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: Spktyr

So do all the rest of the hybrids, I don’t know what that has to do with the basic premise that EV’s are only really “efficient” if you charge them from home. My point was that there isn’t enough generating capacity to handle an
EV fleet. I guess the case can be made that the fact that the IC engine is driving a generator and most likely runs at constant speed makes it easier to run low emissions ( unlike the Prius where the IC Engine can and does drive the vehicle directly when the batteries are kaput


15 posted on 04/22/2012 10:38:32 PM PDT by vette6387
[ Post Reply | Private Reply | To 14 | View Replies]

To: vette6387

That’s exactly the point of the Volt’s systems - and that’s how a modern diesel-electric freight train locomotive works, the diesel is used to generate power and the actual motivation is provided by powerful electric motors.

It’s a great idea - too bad the Volt is a not-great execution. A better idea’s being floated by Jaguar, the CX75. It uses turbines to run generators (turbines are more efficient than piston engines if they can run at a constant speed) and it has 778 wheel horsepower due to the electric motors.


16 posted on 04/22/2012 10:54:07 PM PDT by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
[ Post Reply | Private Reply | To 15 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson