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GM’s Chevy Volt Costs Taxpayers $250,000 Per Vehicle

Wednesday December 21st, 2011   •   Posted by David Theroux at 6:37pm PDT   •   20 Comments

In new analysis from the Mackinac Center, James Hohman discusses how $3 billion in federal and state funding for General Motors’ Chevy Volt, the much acclaimed “green,” plug-in, hybrid electric vehicle, is costing taxpayers $250,000 per car. As noted by Hohman, the Volt “might be the most government-supported car since the Trabant,” the car produced by the former Communist country of East Germany.

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. His analysis included 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 subsidies flow through multiple companies involved in 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 (combination tax breaks and cash subsidies). These are among many of the subsidies and tax credits for the vehicle.

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.

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 subsidy milestones are realized.

Click here for full article.

Featured Image:
General Motor's Chevy Volt


20 Responses to “GM’s Chevy Volt Costs Taxpayers $250,000 Per Vehicle”

  1. Dave Legacy says:
    December 21, 2011 at 8:58 pm

    Turn your scrutiny towards the weapons industry, not a car that represents technological advancement for mass transit.

  2. David Theroux says:
    December 21, 2011 at 10:20 pm

    Dave, We can assure you we do indeed have our attention on the pork, corruption, waste and corporate welfare in defense spending. In fact, we are the leaders in doing so:

    Congress, the Defense Budget, and Pork, by Winslow Wheeler

    “Defense Spending Is Much Greater than You Think,” by Robert Higgs

    “The Trillion-Dollar Defense Budget Is Already Here,” by Robert Higgs

    Those who then hypocritically support corporate welfare so long as goes to their favored crony projects such as “green cars” are no less misguided and guilty of fomenting the debt and spending crisis of the U.S. Instead, see the following book on market-based, road transportation with no subsidies:

    Street Smart: Competition, Entrepreneurship, and the Future of Roads, edited by Gabriel Roth

  3. Rich Selfridge says:
    December 22, 2011 at 10:06 am

    Oh let’s not forget that they have all been recalled. I see no problem with $250,000.00 a piece. Right.

  4. Mark Bolton says:
    December 22, 2011 at 10:38 am

    While I am not a big supporter of government subsidies, I agree with Dave, that the Military-Industrial Complex should be subject of more investigations. While 3 billion in subsidies is alarming, the $250,000 per car sounds crazy, but if the Volt is ever produced in large numbers the per car number will fall dramatically. I personally think lessening our dependence on oil is a good thing, especially when you consider the wars that have been fought to secure oil.

  5. Kris says:
    December 22, 2011 at 11:14 am

    Keep up the good work David. Every wastefull dollar paid for by the taxpayers needs to be exposed. Including your tax dollars Dave.

  6. Dorsey says:
    December 22, 2011 at 1:30 pm

    State supported industry=communism. It most certainly is not provided for in the US Constitution. If they cannot afford their own R&D, too bad. Let them and the politicized unions go out of business. It would be a blessing.

  7. David Theroux says:
    December 22, 2011 at 2:53 pm

    Mark, Then you are in favor of government subsidies, including corporate welfare. The Volt is a boondoggle that cannot succeed without redistributing wealth from the citizenry to interest groups who benefit, and in the process produce a socialist/lemon car that is being recalled with batteries that are toxic.

    The solution is to end corporate welfare for “green” cars AND defense pork, not shift the money from one special-interest recipient to another.

    As for foreign wars for oil, you are indeed correct that this must end and here is the Independent Institute’s new book in this regard:

    No War for Oil: U.S. Dependency and the Middle East, by Ivan Eland

  8. Barney says:
    December 22, 2011 at 5:23 pm

    @Mark, why do you think that an electric vehicle does anything to solve our dependence on foreign imports? First we still use fossil fuels to produce our electricity and the likelihood that any of the alternatives for producing electricity (excepting nuclear) will ever produce enough to drive our cars and vehicles is pretty far-fetched. Meanwhile all the alternatives require something much rarer and more polluting than oil:

    http://topics.nytimes.com/top/reference/timestopics/subjects/r/rare_earths/index.html

    http://finance.townhall.com/columnists/amyoliver/2011/12/18/green_technologythat_pollutes_the_planet/page/full/

  9. HeyBarney says:
    December 23, 2011 at 11:55 am

    Barney, you said “except nuclear” what about Thorium? It would do the same thing as uranium-powered nuclear plants, without the risk of radioactive meltdown or radiation at all. Would remove the process of storing radioactive materials for 10,000 years and is more abundant then lead. We have enough thorium known right now to power the ENTIRE world for the next 1,000 years. We do have alternative energy, however our government suppresses it in their absurd desire for foreign resources. Right now China, Russia, japan and India are making thorium-reactors.....yet we aren’t?

  10. Erik Burgundy says:
    December 23, 2011 at 3:20 pm

    Lets not forget that the heavy metals use to make the batteries are more toxic than exhaust fumes. GM really gets under my skin.

  11. Clark Myers says:
    December 23, 2011 at 3:37 pm

    I can buy 5 Tesla Model S luxury cars, that each seat 7 in luxury and have much better performance, for that same $250k.

  12. David Theroux says:
    December 23, 2011 at 4:18 pm

    Clark, Tesla’s business model is far better than GM’s Big Unions one, but Tesla has also received massive government subsidies ($465 million) and according to Tesla V.P. Diarmuid O’Connell, when questioned in regard to their SEC filings, they “expect continuing losses for at least the foreseeable future.” Tesla has sold fewer than 1,500 cars and battery replacements after 5 years are estimated to cost $30,000, meaning that the cars will have zero replacement value.

    The solution is to get the government out of the car business!

  13. Jeff says:
    December 23, 2011 at 9:38 pm

    Maybe if our tree huggers would lighten up (just a little) and allow for oil drilling off the Florida and California coasts, then we wouldn’t be going off on so many high dollar wild goose chases. My understanding is we have plenty of supply in these areas- so much we wouldn’t have a need for foreign oil- and utilizing them would at least buy us time to perfect alternative technologies that are safe and practical.

    We need to be real about our priorities. Drilling off the coastlines is much more palatable than storing nuclear waste in some cave, not to mention the logistics in getting it there. I imagine the calculations for David’s article included the govt. money thrown to entice buyers.

    @Mark- the Volt will never be produced and sold in large enough numbers to make it practical, nor will GM/U.S. govt. see a ROI. By the time the numbers would even hint at a break-even, the technology will be outdated and replaced by far more cost effective products.

    Side note: considering GM is now Uncle Sam’s stepchild, should we continue to buy Chevys and Buicks? I suppose it depends if we want to see GM sink or swim. Merry Christmas Everybody!

  14. Paul Marks says:
    December 28, 2011 at 6:10 am

    Government subsidies for “mass transit” are wrong – J.J. Hill of the Great Northern railroad proved they were not needed.

    As for cities – it was government action (building “free” roads – and imposing price controls on what mass transit companies could charge passengers, and imposing other regulations upon these companies) that DESTROYED mass transit.

    The companies were driven,by government action, to bankruptcy – where they were easy for their competitors (the auto companies) to buy up and close down.

    And the auto company that did that more than any other? General Motors of course (for example in LA).

    As for calling the Chevy Volt “mass transit”......

    It is a CAR – no more an example of “mass transit” than any other car.

    Nor is it a major “technological advance”.

    Even if one thinks that electric cars (and the Volt is really a hybrid – rather than a real electric car) are the way to go – there are a lot better electric cars than the Chevy Volt.

    It, like all of “Government Motors”, should go into bankruptcy.

    Remember – bankruptcy need not mean an end to a company, if it has possibilities it can emerge from bankruptcy in a transformed way.

    Barack Obama did not spend all this money (and allow GM to default on its debts – including debts owned to Indiana teachers and police pension funds) to “save GM”.

    He did it to SAVE THE UNITED AUTO WORKERS UNION.

    In return for the campaign contributions (and “foot soldiers”) the UAW provides for the Dems.

  15. joe4liberty says:
    December 29, 2011 at 3:40 pm

    I am an avowed tree-hugger. I believe that our dependence on foreign oil – more importantly our tax subsidized dependence is a key factor in our economic downturn. The price at the pump is not the true cost of oil. If we ended the foreign aid, and subsidies, as well as the trillions in military used to support those “interests”, the price at the pump would skyrocket, but the tax burden would fall through the floor. As a result the alternative energy market would take off. But thanks to those subsidies, we now have to subsidize the common sense alternatives because they do not now make “economic sense” in light of the artificially low costs of traditional energies (and the tax burden making personal investment in such vehicles unrealistic). As for the fossil fuel needed to power an electric car, I have solar on my roof. And before attacked, I agree that the solar industry is getting unfair subsidies, but the point above holds true with solar as well. If oil cost at the pump what it REALLY cost, instead of taking those costs from us as taxes, solar would have taken off long ago, and there would be no subsidies. My problem is that I am desperately trying to find an electric car that is not subsidized… which doesn’t exist, so I’ve lowered my standard to only buying from those that didn’t accept the TARP bail-out (I’ll NEVER buy GM or Chrysler again as long as I live).
    So count me as one of the “free-market tree huggers” who vehemently disagree with Dave and Mark, because I KNOW that the environment would be much better off if we could just shrink the government’s hand – in EVERYTHING, which included industries, companies, and programs that I believe in.

  16. Tonight's CNN/Southern Republican Presidential Debate - Grasscity.com Forums says:
    January 19, 2012 at 11:25 am

    [...] Originally Posted by Jamayah 4 new polls out today so thought i'd link the RCP latest average page since it's got them all. RealClearPolitics – Election 2012 – South Carolina Republican Presidential Primary Why doesn't realclearpolitics include ARG polls. That is where we were @ 20% and are still @ 19% GM [...]

  17. Robert says:
    February 29, 2012 at 7:06 pm

    Joe the treehugger, you do realize that the pinnacle of solar panel technology is only 19% efficient?

    And Dave, your response @ #2 was awesome.

  18. The Global Warming Bubble says:
    March 9, 2012 at 8:45 pm

    [...] whether the Volt has flopped because of its limited all-electric range, its high price tag (despite massive government subsidies), or the fact that its battery might have a tendency to catch on [...]

  19. The Case Against Obama - Page 3 - US Message Board - Political Discussion Forum says:
    August 10, 2012 at 10:09 am

    [...] and Huyndai are making a profit. How long can these kinds of destructive policies be continued? GM’s Chevy Volt Costs Taxpayers $250,000 Per Vehicle | MyGovCost | Government Cost Calculator [...]

  20. Michael Laborde says:
    October 26, 2012 at 4:21 am

    It will take billions of more of our tax dollars to ever get to where the hybrids and clean technology will ever become efficient. A cost at this time in our budget will continue to bankrupt our nation. If this technology were worth it, don’t you think that the private sector would jump on this and make big $$$$$. We are a long ways from affordable clean technology.

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