Requiem For the Electric Car: Titanic Subsidies, Miniscule Sales

The Chevrolet Bolt EV electric car is unveiled at CES International Wednesday, Jan. 6, 2016, in Las Vegas.
AP Photo/Gregory Bull

Big Government politics can be understood as a jihad against the laws of supply and demand… which always win, but that doesn’t stop the statist jihadis from trying again. (It helps that their endless war on economic reality is funded with other people’s money.)

This has rarely been more clear than in the disgusting spectacle of government-subsidized electric cars.

Don’t misunderstand: there’s nothing wrong with people who honestly want to buy electric cars at fair market prices, or entrepreneurs who find a way to make an honest buck selling them.

No such buyer or seller exists anywhere on the planet Earth.

We are all forced, at gunpoint, to lavishly subsidize the manufacture and sale of electric cars, which tend to be a boutique product for very rich people.  Every step of production and sale is juiced with subsidies. No one is selling electric cars for their actual market price, and even with all that subsidy sugar to help the medicine go down, hardly anyone is interested in buying them. It’s one of the biggest forced transfers of wealth from middle-income taxpayers to rich people ever conceived.

The amount of money wasted on the electric-car boondoggle is staggering… and it’s all driven by a tiny handful of political, media, environmentalist, and Big Business elites, imposing their vision on the rest of us and picking our pockets to make their dreams come true.

Charles Lane of the Washington Post laid out some grim numbers for 2015 electric car sales on Wednesday:

Americans bought a record 17.5 million passenger vehicles in the United States, of which 116,548 — 0.67 percent — were either plug-in hybrids or all-electrics, according to That was about 6,500 fewer than in 2014.

Automakers have sold 407,136 electrics (EVs) since they hit the market in 2010. That is 0.16 percent of the 250 million-plus U.S. passenger vehicle fleet. Assuming all are still on the road, carmakers must sell 300,000 this year and next to reach 1 million, or 0.3 percent of the fleet, by 2018.

Lane does a fine job of explaining why the “value proposition” of electric cars limits their sales potential: the technology is unreliable, people have limited interest in cars that can only travel for a relatively short distance before they run dry, they take a long time to recharge after the batteries run out, and the savings on fuel costs come nowhere near offsetting the far higher price of an electric vehicle, even with those lavish subsidies.

It’s easy to see the cost/benefit calculation that tells most auto buyers that paying thousands of dollars more for a car with vastly reduced utility (you can’t drive it as far, or as frequently) to save a few hundred dollars on energy, at best, makes very little sense.

These are perfectly sensible reasons why the demand for electric cars is likely to remain very modest, barring some astounding improvements in technology… but politicians who desire increased electric car use for ideological reasons, and auto-company cronies who love getting rich off the public teat, think they can beat that old Supply and Demand demon by artificially lowering the price of the vehicle until demand goes up.

Those subsidies are far higher than the direct $7,500 tax credit for electric vehicle purchases mentioned by Lane. If our pockets weren’t being picked to keep this absurd market on life support, the true market price of most electric cars would be closer to double the sticker price – a reality made plain by the uncomfortable admission of manufacturers that they lose a boatload of money on every sale, even with all the taxpayer loot they receive.

Then you’ve got Tesla, whose founder Elon Musk enjoys what Lane wittily describes as “the most fawning media treatment of any public figure since Pravda covered Stalin.” Tesla’s sales are miniscule – a little over 50,000 vehicles worldwide in 2015 – but it needed $4.9 billion in U.S. state and federal subsidies to achieve those pitiful results, and the poor saps in some other countries got soaked even worse.  A little more “genius entrepreneurship” like that, and we’ll be Stalin’s Russia.

Why the hell is the U.S. government helping a billionaire screw middle-class taxpayers to subsidize the sale of $100,000 sports cars to rich dilettantes?

Even the ostensibly public-spirited reason for all this crony capitalism is a scam, because their effect on the “carbon footprint” is highly debatable. A great deal of carbon dioxide is emitted in their manufacture – more than double what it takes to create a gas-powered automobile – and the power to charge them has to come from somewhere.

Environmentalist Bjorn Lomborg has argued that the lifetime carbon footprint of an electric car is only a little better than a gas-powered vehicle, unless the owners keep them a very long time and rack up a huge amount of mileage; that heavily-subsidized “green machine” a rich environmentalist just forced low-income taxpayers to help him purchase with thousands of dollars in subsidies will end up saving Gaia about $44 in climate damage.

After making a sober assessment of the benefits and drawbacks, very few people buy electric cars. If they were actually obliged to pay the true price, virtually no one would. Those who objected to the billion-dollar subsidies paid for start-up on these projects were assured that ballooning sales in the future would disperse that cost across a fleet of millions of vehicles; in truth, sales are deflating, and targets are not being met.

The American taxpayer should be absolutely furious at everyone involved in the electric car scam. The opportunity cost of what could have been done with all that money should make us seethe with rage – or, better yet, we should be allowed to keep our money and make our own decisions.

Of course, none of the perpetrators will suffer any consequences whatsoever for their failed attempt to impose their preferences on an unwilling populace, and they won’t hesitate to do the same thing again, the next chance they get.

Those electric-car sales figures sound like a terminal diagnosis for an unsustainable business model, although Lane notes we’re on the hook for another $7.5 billion on subsidies through 2019 keeping it alive. How long before the victims of this highway robbery wise up and demand an end to those subsidies?


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