Chevy Volt is a premium, tax-funded experience
Premium fuel only
10 percent more for 5 percent better efficiency
So, the Chevy Volt will require premium gasoline, but don’t worry, premium gasoline makes the Volt 5 percent more fuel efficient when in range extended mode. Unfortunately, however, premium gasoline costs about 10 percent more.
Then again, if you can afford a Chevy Volt, do you care about the cost of premium gas? Of course, if you can afford a Volt, do you need a $7500 tax credit?
“The Volt is a game-changing product,” says an Obama vehicles executive. The iPhone was a game-changing product, and it didn’t take a tax credit. And they sold over 90 million of the things. A game-changing product does not need a tax credit. They’re mutually exclusive.”
Rush Limbaugh made that point, recently, according to Straightline, which then used Limbaugh’s rant to ask whether vehicles like the Volt are deserving of tax credits.
I say yes, but not in the way the plug-in tax code is currently written. Like the Volt, the current plug-in tax credit doesn’t make cost-effective sense. Too much focus is on battery size rather than the potential of real world change. Unfortunately, if a plug-in is going to achieve success, it’s probably going to have to be a small battery plug-in hybrid according to the experts, and even then success will be difficult.
Consequently, while I’m not a big Limbaugh fan or hater (to be honest I’ve never listened to a show), he makes a valid point. Ultimately, competition and free markets are not purely evil tools of the devil’s capitalism, and when tax credits are focused on political favoritism rather than real world realities, inefficiency is inevitable.
Today, automakers have many tools to increase automotive efficiency, they just don’t have any incentive. Consumers don’t care that much, unless gas prices are sustainably significantly higher, and regulations don’t demand pushing the limits of efficiency. Thus, if tax credits are the best solution, then they must inspire cost-effective, efficient competition. Otherwise, it’s all just tax-funded greenwashing and a prayer for a miracle.
On the other hand, to be sure, America can expect Japan, Korea and China, for instance, to compete against our products, and in the end it will all boil down to one thing: the most bang for the buck.
For now plug-in tax credits have little to do with the most bang for the buck or real competition, and that might be OK, at the R&D level. The possibility of speeding up a battery breakthrough is a worthwhile endeavor, but it can’t be the primary goal, especially when the science isn’t very supportive. Furthermore, the move to battery-powered vehicles is ultimately about efficiency, and we should be striving towards that efficiency as efficiently as possible if we want the most bang for our tax-funded policies.
The Volt is an exceptionally cool car. So what?
When it come to plug-in vehicles, the point is reduced oil dependence. According to the battery experts the Volt isn’t the most cost-effective hybrid configuration, and if battery technology makes a major breakthrough, plug-in hybrids might become irrelevant, as pure battery-powered EVs would be more cost-effective. Since study after study after study clearly demonstrates that consumers are supremely driven by cost-effectiveness, cost-effectiveness needs to be the primary driver of any plug-in vehicle because its the only thing that will achieve long term success and impact.
The Volt is an exceptionally cool car, but if it is more about marketing than real change, then how cool can it really be? In my opinion, the Volt is just too much about marketing rather than change. Inevitably selling 45,000 Volts per year to justify selling more than a million gas-guzzling pickup trucks just doesn’t balance out.
Some might argue it’s all about baby steps, but I believe a lot more can be done and it would be nice, for once, to see real leadership from the likes of GM.
The volt is a pretty cool car in and of itself. It’s hard to compare to a typical compact car. Check out my full review including test drive experience etc at http://www.mychevroletvolt.com
That’s not “that” big of a deal….
Those willing to pay 40K for a Volt are more concerned about using less fuel than they are about saving money.
In future, more cost effective models, that target average consumers, this will become a bigger issue…
That business tax credit has been the biggest bunch of crap. Is it still available? I thought Congress finally put a fork in that corrupted piece of legislation a while back? Perhaps they just reduced the amount of credit/deduction available?
I’ll have to check into that.
——-
Wow! Yup, the Section 179 deduction, aka, “SUV Loophole” is still around and still available this year.
What a travesty.
There’s a hybrid pickup truck available today, several large hybrid SUVs. Such hybrids have been available for several years. Minimally, considering the government’s goals, shouldn’t hybrid versions have been, and be, the ONLY vehicles available today for such deductions? If you have a legitimate business use, the long term fuel costs will pay for the extra technology+.
That’s where tax credits should come in. Make so its only a little more than a conventional version, but the long term fuel costs result in a big long term bonus. With these types of vehicles, fueling costs are HUGE. The average Tahoe hybrid driver, according to the gov, saves about $800 per year. So, if the tax credit brings the Tahoe hybrid to a cost of just $2000 above MSRP, within 3 years the average Tahoe driver has recovered their extra costs + $2000 after 5 years.
Plus you’re getting a tax deduction!
I guess spending it out of both ends is just so much more efficient.
How many SUV’s get tax credits? At least half of the people I know who own SUV’s got a tax credit thru their business. Most do not use the SUV for business but give it to their wife to tote the kids around.