Very stiff competition for this week’s coveted Power Line Green Weenie Award. Al Gore is even warming up for another shot at another Green Chakra Weenie for his solar-powered mantle. But one contender has risen above the rest of the green slime to claim the prize: the electric car.
Who says? The Congressional Budget Office, that’s who. In a recent report on The Effect of Federal Tax Credits on the Purchase of Electric Vehicles, the CBO concludes that electric vehicles are a loser for everybody (especially taxpayers, who will shell out an estimated $7.5 billion in subsidies—mostly to wealthier people, of course, by the year 2019):
At current vehicle and energy prices, the lifetime costs to consumers of an electric vehicle are generally higher than those of a conventional vehicle or traditional hybrid vehicle of similar size and performance, even with the tax credits, which can be as much as $7,500 per vehicle. That conclusion takes into account both the higher purchase price of an electric vehicle and the lower fuel costs over the vehicle’s life. For example, an average plug-in hybrid vehicle with a battery capacity of 16 kilowatt-hours would be eligible for the maximum tax credit. However, that vehicle would require a tax credit of more than $12,000 to have roughly the same lifetime costs as a comparable conventional or traditional hybrid vehicle.
Assuming that everything else is equal, the larger an electric vehicle’s battery capacity, the greater its cost disadvantage relative to conventional vehicles—and thus the larger the tax credit needed to make it cost-competitive.
GM is probably losing money on each Volt it sells (though GM disputes this):
Reuters recently reported that GM is losing a bundle on each Volt it sells — despite the little plug-in hybrid’s steep $39,995 base price.
While GM took issue with Reuters’ math, it’s clear that the innovative car isn’t a moneymaker for General Motors. With sales of just a few thousand in the best of months, it’ll be many years before the car manages to repay its development costs, estimated at over $1 billion.
Meanwhile, Toyota has announced it is scrapping plans to bring a new all-electric vehicle to the market:
“The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge,” said, Uchiyamada, who spearheaded Toyota’s development of the Prius hybrid in the 1990s.
Now, if the automakers would offer a model in the shape of a Green Weenie, like the old Oscar Meyer Weinermobile, I might be tempted to buy one!