Is an Electric Car Bailout in Our Future?

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By Katie Tubb

Perhaps buyers are waiting for President Obama’s proposed $10,000 tax credit for the Chevy Volt. Despite government bailout money and incentives, GM temporarily halted Volt production and laid off 1,300 Detroit employees as lackluster demand resulted in low sales. Unfortunately, this is becoming a routine ordeal that inspires a glut of political debate. This is not the way business should be.

The Volt’s sales, employment, price tag, and safety features automatically have become the fodder of larger political debates—not because politicians in Washington especially care about the happiness of manufacturers and drivers, but because they are investors in the success of GM and the green agenda that it represents. This is especially true for the Obama Administration, which has tied jobs promises to green energy and has set an arbitrary goal of putting 1 million electric cars on the road by 2015. The result is that the federal government is a stakeholder in the car company. It has put billions of bailout dollars at risk, which will impact public confidence in the President and his policies.

In contrast, notice the kind of attention Nissan is getting. The performance of Nissan’s Leaf, which (like the Volt) also qualifies for the currently $7,500 tax credit offered under the Bush Administration, is not much better. The company sold 9,674 of its version of the compact electric car last year, while Volt sold only 7,671. Both were far below expectations. However, the Leaf escapes much of the bad press and political scrutiny endured by the Volt, because Nissan never leaned on the federal government to prop it up.

If the Volt and GM continue to hobble along, the government will once again look foolish and hold some responsibility. It’s time the Administration learned its lesson and stepped out of the market to let American companies and consumers be the judges of this new technology.

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