Chevy Volt Costing Taxpayers Up to $250K Per Vehicle

[Silent_Bob]

http://www.michigancapitolconfidential.com/16192

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors' plug-in hybrid electric vehicle. Hohman included in his analysis 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.

The Volt is subsidized by multiple companies on its way to production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. For example, the Department of Energy awarded a $105.9 million grant to the GM Brownstown plant that assembles the batteries. The company was also awarded approximately $106 million for its Hamtramck assembly plant in state credits to retain jobs. The company that supplies the Volt's batteries, Compact Power, was awarded up to $100 million in refundable battery credits. These are among many of the subsidies and tax credits for the vehicle.

It's very unlikely all the companies involved in the production of the Volt would ever receive all the $3 billion in incentives, Hohman said. But the analysis looks at the total value that has been offered to the Volt in different aspects of production – from the assembly line to the dealerships to the battery manufacturers. The tax credits and subsidies are offered for periods up to 20 years, though the majority is offered over a much shorter time frame.

GM has estimated they've sold 6,000 Volts so far. That would mean each of the 6,000 Volts sold would be subsidized between $50,000 and $250,000, depending on how many government subsidies were realized.

If those battery manufacturers that were awarded incentives to produce batteries the Volt may have used are included in the analysis, the incentives per Volt increase to $256,824. For example, A123 Systems received state and federal support and bid to be a supplier to the Volt but the deal instead went to Compact Power. The $256,824 amount includes adding up the subsidies to both companies.

The $3 billion in total value includes $690.4 million offered in incentives by the state of Michigan and $2.3 billion in federal money. That's enough to purchase 75,222 Volts with a sticker price of $39,828.

There was likely more state and local assistance provided to Volt suppliers that was not included in the analysis, Hohman said. For instance, the Volt is being assembled at the Poletown plant in Detroit/Hamtramck, which was built on land acquired by General Motors through eminent domain.

"It just goes to show there are certain folks that will spend anything to get their vision of what people should do," said State Representative Tom McMillin, R-Rochester Hills. "It's a glaring example of the failure of central planning trying to force citizens to purchase something they may not want. ... They should let the free market make those decisions."

"This might be the most government-supported car since the Trabant," said Hohman, referring to the car produced by the former Communist state of East Germany.

According to GM CEO Dan Akerson, the average Volt owner makes $170,000 per year.

[cathleeninnh]

And they are buying them back. All who want to, get to return them.

[Russell Kanning]

and I tthought I used to pay a lot to not ride the trains in SoCal

so at those prices .... do they deliver them to your door?
and if you don't like them ... do you get a refund of the government that has failed you?

[littlehawk]

Oil Companies dictate the market. IMO electric isn't the answer either because then you rely on electric companies. I want one of those jet engines that you strap on your back.

[Russell Kanning]

have you seen any of these on the road?

[cathleeninnh]

Don's boss (probably makes that $170k/yr) has one and loves it.