By Charles Lane, Published: March 6 Washington Post
President Obama boasted at a United Auto Workers conference last week that General Motors was back in business, producing cutting-edge vehicles like the plug-in electric Chevrolet Volt. He even promised to buy one when his time in office ends “five years from now.”
Whoops! Just three days later, GM announced that it would suspend Volt production for five weeks this spring, idling 1,300 workers at a Hamtramck, Mich., factory.
Alas, Obama’s endorsements notwithstanding, there’s not much of a market for this little bitty car, at least not at the price of almost $32,000 — after a $7,500 federal tax rebate.
GM fell 2,300 units short of its sales target (10,000) for 2011. It is not on pace to hit 2012’s goal of 45,000 units.
So much for Obama’s goal of 1 million all-electrics and plug-ins on the road by 2015.
A123 Systems, a maker of electric-car batteries that has received $374 million in state and federal loans, announced 125 layoffs last fall. The cause: problems at its main customer, Fisker Automotive, which builds expensive plug-in electric cars. Fisker got a half-billion in loans from the Energy Department, though the money was recently frozen because of the company’s failure to meet production targets.
These events confirm the wasteful folly of allocating capital according to the dictates of politicians, such as when Sen. Charles Schumer (D-N.Y.) declared in November 2008: “A business model based on gas — a gas-guzzling past — is unacceptable. We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car.”
The electric vehicle flop also illuminates a point about science — or the politics of science.
Democrats and liberals are fond of calling their conservative and Republican adversaries “anti-science.” To the extent that the right espouses “creation science,” or disputes established facts about environmental degradation, it’s an appropriate label.
But progressives’ fascination with electric cars and other alternative-energy schemes reflects their own refusal to face the practical limitations of alternative energy — limitations that themselves reflect stubborn scientific facts.
Stubborn Scientific Fact No. 1: Petroleum packs a lot of energy per unit of volume. (Each liter contains 34 megajoules.) Consequently, gasoline makes a cheap, portable and convenient motor fuel.
By contrast, even state-of-the-art batteries deliver far less energy than gas, in a far bigger package. A Volt can go 35 miles on a single charge of its 435-pound battery. This sounds like a big deal until you realize that a gas-engine Chevy Cruze gets 42 miles per gallon — and costs half as much as a Volt.
It costs a fortune to pump, refine and ship crude oil. Yet even accounting for all that, gas-powered cars are a better value than electric vehicles and will be for some time. Gas savings on the Volt would take nine years at $5 per gallon to offset its higher price over the Cruze, an Edmunds.com analysis found last month.
Gas consumption creates “negative externalities” — instability in the Middle East, carbon emissions — not fully reflected in its price. But another fact about electric vehicles is that their juice comes from the fossil-fuel-burning grid in the first place.
Oh, and how are you supposed to resell your electric vehicle once you’ve driven it five years and the battery is depleted?
Advocates insist that the government should help them crank up mass production of electric vehicles. Once economies of scale kick in, they argue, electric vehicles can compete.
Four decades after the 1973 oil crisis, this logic is wearing thin. Any company that figured out how to build a practical mass-market electric car would be swimming in cash. That no one has done so suggests we are bumping up against the limits of nature, not just politics or economics.
Certainly the many hundreds of millions of dollars that the U.S. government, GM and GM’s competitors have poured into the effort might have been better spent on more plausible energy-efficiency efforts, such as advanced internal combustion engines.
Instead, Big Government and Big Business have focused on the Volt, the Fisker Karma or the Tesla Roadster, none of which is remotely affordable for the “99 percent” of Americans. And yet in his 2013 budget, Obama proposes to boost the tax credit for electric vehicle buyers to $10,000.
What’s “progressive” about that, I’ll never understand.