The tax credit for alternative motor vehicles, doled out by the US taxpayers, was just over $3,000 for the 2005 MY Toyota hybrids, and was phased out for Toyota hybrids in two years because of the number of vehicles sold in such a short period of time.

That's less than half of the US credit ($7500) for electric vehicles and one-third of the Ontario plan ($10,000), and unlike the tax credit for hybrids, this one does not have a sunset clause.

Taking into consideration that for every Volt sold, GM will lose money, I think that says a lot about the true cost, and why Toyota has said that it will not push electric vehicles for the retail market (fleet-only sales with the Prius plug-in).

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That's not it. Like the US version of the tax credit - I suspect - the Ontario bill specifies the size of the battery, which means that only the Volt would qualify.

That seems unfortunate to limit competition in electric vehicle sales.

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I don't believe the size of a battery is patentable.

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How about all of them stop using my fucking taxpayer money to sell cars I will never buy?

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Tim please provide some evidence of all of these alleged companies that were ready to "fill in the market void" because I assert they don't and didn't exist. The world currently has a huge amount of excess production capacity in regards to automobiles, that plus the huge barriers to entry into the automotive market would pretty much prevent anyone from filling any void that would have been created by GMs collapse. In fact it is pretty much agreed upon had GM gone chapter 7 that the whole market would have collapsed due to the failures of key suppliers that such a liquidation would have created.

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Paul,

Good Question, thanks!

As you said there is a current glut in supply which will take many months to clear up. This would have given the new car companies time to ramp up using PRIVATE investors instead of taxpayer debt. Of course, in order for this to happen they would have to tap the current supply chain for parts. ANY good parts company would LOVE to have many smaller customers than just a few big ones. After all, NOBODY likes to have all their eggs (sales) in one basket!

Do you like choice? The separate divisions of GM & Chrysler would have been sold off to PRIVATE investors to compete AGAINST each other. PLUS here's the top 10 new car companies:

http://www.popularmechanics.com/automotive/new_cars/4291426.html

Imagine all these companies competing against each other for YOUR money. This vigorous competition would mean lower cost, higher quality and much more innovation which is all good for US, the consumers and less crony capitalism empowering politicians.

Like even MORE choice?

http://www.progressiveautoxprize.org/teams

How are ANY of these companies going to compete against the US Treasury and bottomless taxpayer funding of companies that are "too big to fail"?

Perhaps if we had 50 small car companies competing, NONE would be "too big to fail" and NONE would ever get a taxpayer funded bailout. This would be good for the consumer, but bad for corporate profits and political coffers. This would be good for Free Market Capitalism and BAD for Crony Capitalism.

Crony Capitalism is why the politicians voted for the bailouts... POWER!

http://en.wikipedia.org/wiki/Crony_capitalism

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Tim, I think you under-appreciate the effect of economies of scale on the cost of manufactured goods. This would do two things:

It would make the products of the 50 car-makers MORE expensive, because each model would be produced in batches of 10,000 rather than 100,000.

When those 'not too big to fail' companies started to fail, the companies with the lowest overhead -PER CAR- could gobble up the abandoned market share much more easily than new market entrants, which would lead you right back to only having a few large companies.

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GoodCheer said;

"... which would lead you right back to only having a few large companies."

Good point, but that would take time. Plus YOU underestimate the huge bureaucratic black hole that exists as entities, both corporate and governmental increase in size.

This level upon level of middle management dramatically increases costs, slows response to market cues and would not exist with many small companies competing with each other.

Faster market response and much less middle management bureaucracy would offset much if not all of the large company “economy of scale” benefit since the parts suppliers would still be producing many of the parts at scale. PLUS the market would adjust as long as some federal gov’t “car czar” didn’t try to design cars in Washington.

Remember, at one time we had MANY car companies and their consolidation via acquisition & attrition took over 100 years.

Competition is Good! Monopoly is BAD!

Central Planning and Crony Capitalism is VERY, VERY BAD!!!

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Tim: I would agree with you if anything like a "free" market existed here in the U.S. Unfortunately, it does not, and this is not due to some malicious intervention by the government. You mentioned the government manipulating the markets with central banks and "fiat currency." I would argue that the large corporations control the market much more strictly than the government ever has. How do you think we got these corporations that are "too big to fail" in the first place? Because as they grew, they got more market power which allowed them to control the market more and more tightly, squeezing out other companies and drowning competition. Ideally, it *would* be nice to let those big whales fail to promote competition, but what about all the normal people who work for them? Should we just shove them out on the street? Compared to that, I think that giving them a bit of a nudge in the right direction, which seems to be what the government is trying to do, might be a more humane solution. And, who knows? Now that GM and others aren't as powerful, maybe more competition will rise up and give people more options.

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