You are the one paying for Chevy Votl

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Marty
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You are the one paying for Chevy Votl

Post by Marty »

Every Chevy Volt has over $250,000 in government subsidies

The total amount of state and federal subsidies for each Chevy Volt sold is as much as $256,824 per vehicle according to a fiscal analysis by Michigan's Mackinac Center for Public Policy. All for a car that only costs $39,828.

To get to this number analyst James Hohman looked at 18 government programs (rebates, grants, loans, tax credits) and divided that number by the amount of Chevy Volts sold thus far. There's a total of $3 billion in subsidies including $2.3 billion in federal money and $690.4 million offered by the State of Michigan.

Divide into that the 6,000 (or so) Volts sold thus far and you arrive at their number. Or,actually, you arrive at a number closer to $500,000. The math's a little fuzzy.

Of course, this is the largest possible number — because many of these subsidies only max out if the suppliers and companies involved hit their maximum employment/production targets, as they themselves admit:

It's unlikely that all the companies involved in Volt production will ever receive all the $3 billion in incentives, Hohman said, because many of them are linked to meeting various employment and other milestones. 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. Some tax credits and subsidies are offered for periods up to 20 years, though most have a much shorter time frame.

This figure also wouldn't pass an MBA accounting course as it assumes that you're only going to sell 6,000 cars. Ever. It's artificially low because some of these subsidies are 20-year grants. If they sell only 6,000 cars a year for 20 years that number comes down to $25,000 per car.

Boeing spent $10 billion developing the 777. If they only sold ten of those, they spent $1 billion per aircraft. They've actually sold about 1,000 of those, for a price of $10,000,000 per plane thus far. Given the $200 million base price, we'd all agree that's a pretty decent investment.

You can play with the math all day because it's mostly made up and even includes tax breaks, which doesn't involve the government paying money to the company, but merely not collecting taxes from them.

And since this money is being spent trying to speed up our nascent battery production infrastructure — a large portion of the subsidies go to battery suppliers — so it can catch up with the rest of the world it's possible this $3 billion is actually a smart investment in an important future industry.

So, yeah. The maximum price-per-vehicle for a Chevy Volt is $250,000 per vehicle — right now — if you make all the most pessimistic assumptions and the government hands over all their grant/subsidy money to companies who don't meet the goals built into the programs.
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Marty
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Re: You are the one paying for Chevy Votl

Post by Marty »

The Chevy Volt, which is a plugin extended drive hybrid, will be taken off the production line for 5 weeks. The halted Volt production will lay off 1,300 Detroit workers. The heavily subsidized, eco-friendly car was touted as a job creator. GM claims that the 5 week layoff will be temporary. With $2.3 Billion of the car’s $3 Billion in subsidies coming from the Federal Government, the current sales put the subsidized cost of each Chevy Volt sold at $200,000 a piece. This is an excellent example of why the government should stick to what it does best. Or at least…stick to the powers the Constitution gives the government. (I forgot the government cannot be the best at anything!)

GM’s 2011 goal of selling 10,000 units of the Volt was not met and they only sold 7,671 units. They hoped to expand production in 2012 to 60,000 Chevy Volts. But with total sales this year at 1,623, Chevy would have to sell an average of 5,000 units a month to even come close to meeting that goal. GM spokesman Chris Lee said, “Even with sales up in February over January, we are still seeking to align our production with demand”. Translated, that means Chevy is going to halt production for 5 weeks. This sounds like the slow dying process of another failed government subsidy, of course at the the expense of future generations.

I am not superstitious, but they say things happen in 3′s. First Solyndra, then the Chevy Volt. So what is next? For the hard working citizens of the United States…I hope that we have learned our lesson. What lesson is that you may ask? That a government that governs the least…governs the best!
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Grumpy
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Re: You are the one paying for Chevy Votl

Post by Grumpy »

Marty wrote:


I am not superstitious, but they say things happen in 3′s. First Solyndra, then the Chevy Volt. So what is next? For the hard working citizens of the United States…I hope that we have learned our lesson. What lesson is that you may ask? That a government that governs the least…governs the best!

Happen in threes? Happening by the dozen these days.
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