Endless auto bailout

Endless auto bailout

June 12th, 2012 in Opinion Free Press

How many ways do the American people have to say "No" to taxpayer-subsidized electric and hybrid-electric cars before Washington gets it?

Sales of the cars are notoriously slow. In one month earlier this year, for instance, only about 600 hybrid-electric plug-in Chevrolet Volts were sold, compared with around 27,000 Chevrolet Silverados. The numbers were similar for Nissan's electric-powered Leaf, though the Nissan Altima had sales of more than 22,000. All told this year, manufacturers of electric vehicles have sold only about 10,000 of the cars - or less than one-fifth of 1 percent of the car and truck market in the United States.

And that is despite the $7,500 tax credit that Congress showers on buyers of electric cars.

Now add the new electric version of the Honda Fit to the ungainly mix.

The electric Fit gets the equivalent of 118 miles per gallon - a stunning figure, to be sure, but one that comes with a sticker price nearly twice as high as the 31 mpg gas-powered Fit.

A bargain for buyers? Scarcely. Even with the subsidy, it would take an estimated 11 years before the fuel savings would make up the difference in upfront costs between the electric and the gas versions for a typical motorist. How many drivers even keep a vehicle 11 years nowadays?

Plus it takes three hours to charge the vehicle, and its range at full charge is only 82 miles. That's not a model of convenience.

And for those who remain ever so concerned about greenhouse gas emissions, the Fit isn't necessarily the environmentally friendly choice. In regions of the country that rely largely on coal for electricity, the Fit actually generates half again the level of greenhouse gases as a gas-electric hybrid that gets 50 mpg.

Honda itself doesn't seem all that certain about the electric Fit's prospects: It plans to lease only 1,100 of the vehicles in the first two years it is on the market.

Alas, the prospects that the vast majority of Americans who do not choose to buy electric cars will be rescued from having to subsidize the vehicle choices of those who do seem equally dim.

There is a lot of debate over whether the multibillion-dollar 2009 federal bailout of the auto industry was wise. An equally valid question, though, is when the ongoing, subsidy-driven bailout of carmakers' electric vehicles will end.