PEV 2009: GM's Lauckner wishes for bigger incentives to get drivers out of gas-powered vehicles
At this point, it's no secret that the Chevy Volt and other plug-in vehicles are not going to come cheap. The least-pricey full-speed electric vehicle may very well be the Nissan Leaf, which after incentives might drop into the $27-28,000 range before the extra cost of leasing the battery. While the operational costs of these cars should be substantially less than any internal combustion vehicle, customers rarely think that far ahead when signing up for a car loan. That's especially true when gas remains well under $3 a gallon here in the U.S.Speaking at the Business of Plugging In Conference in Detroit, Michigan this week, GM's VP of Global Program Management told the audience that incentives will need to be increased for plug-in vehicles to start gaining a real foothold in the U.S. market.
Although GM won't announce pricing until its launch a year from now, most observers expect the Volt to run about $40,000. With a $7,500 federal tax credit, it will still be well over $30,000, which is very expensive for a compact car. Unless gas prices get significantly higher or incentives are increased, most buyers are unlikely to find this or other plug-ins to be a good economic proposition.
[Source: Detroit News]
Reader Comments (Page 1 of 2)
Boyprodigy1 3:27PM (10/21/2009)
If GM wants bigger incentives to get people out of gasoline vehicles, shouldn't they offer more options. Ultimately their flagship green vehicle is still semi-dependant on gasoline (and they could easily just make it fully electric). What they don't realize is that they need to take the lead...
Reply
Throwback 3:34PM (10/21/2009)
How about building competitively priced and desirable products? Why ask tax payers to pay to create an artificial demand?
Reply
KK 3:53PM (10/21/2009)
The fact is, gas price is artificially low because it doesn't include the cost of dealing with the resultant pollution, including global climate change. Which means "green" energy sources, and consumers who use them, are penalized for their choice.
The obvious solution would be to put a tax on all fossil fuels to even the playing field.
Dave 4:04PM (10/21/2009)
"How about building competitively priced and desirable products? Why ask tax payers to pay to create an artificial demand?"
Good luck. Even if electricity were free, BEVs don't stand a chance at competitive cost.
At 50 mpg, the Prius needs 4000 gallons of gas to go 200,000 miles. At current prices, thats $10,000 worth of gas.
The battery pack in the Tesla, which is unlikely to last much more than 100,000 miles, costs $25,000.
Ignatius 4:54PM (10/21/2009)
Hey Dave, can I borrow your crystal ball? I'd like to make some crap up too.
Joeviocoe 1:16PM (10/22/2009)
Two common misconceptions that Dave and many others have:
Tesla Roadster battery packs cost up to $25k in 2006 when they were first developed. They would cost LESS now and MUCH LESS when Roadsters start passing 100k miles.
Tesla Motors have said repeated that the replacement warranty for batteries is 100k or 5 years, whichever comes first. Li-Ion batteries in such a large pack are more likely to suffer from age rather than cycle use. 200k miles would take about 12 years as a daily driver. But even if you need to buy 2 additional packs at $10k each, the $20k spent is still only 20% of the car price ($100,000) for one of the fastest sport cars out there. And when there is almost no maintenance cost for the rest of the car, it is a good deal!
Comparing a Prius to a Roadster is not even apples and oranges, but tomatoes and suspension bridges.
"At 50 mpg, the Prius needs 4000 gallons of gas to go 200,000 miles. At current prices, thats $10,000 worth of gas." -Dave
And when gas is $4.00 per gallon that is $16,000
For the Model S that might buy you one battery. Which might take you 200,000 miles depending on battery technology projections for 5 years from now.
Not to mention the rebate/discount you get because "second-life batteries" are worth money for other applications. http://green.autoblog.com/2009/10/21/nissan-and-sumitomo-launch-venture-to-reuse-automotive-batteries/
Things get competitive very quickly as petroleum prices go up and battery costs go down. That is the trend that is not only predicted, but obvious.
wincros 3:39PM (10/21/2009)
There are incentives in place that seem pretty generous and if GM were to build lots of low priced cars that took advantage of them, they could make a lot of money. I don't think people are too interested in giving bigger incentives to people who can afford a $45, 000 Volt. They seem to be stuck in the slow drift toward the iceberg. They would garner more respect if they did something to change direction.
It may be obvious, but there is an interesting article on the bad management at GM here:
http://www.huffingtonpost.com/2009/10/21/steven-rattner-gm-had-stu_n_328235.html
Reply
paulwesterberg 4:24PM (10/21/2009)
I agree, alternatives like the miev and leaf stand to sell a lot more units because they are designed to hit a much lower price point.
David Bevington 3:47PM (10/21/2009)
There is only one way to get people out of gas powered vehicles. It is to raise the price of gas. The difficult question is how do you persuade the american public to accept much higher gas (and diesel) prices?
I think there is a way to sell this to the american public. Its energy independence. I think President Obama is capable of selling an energy independence package to congress and the American people.
So what would an energy independence package look like? Very simple really. From two years from now and for the next twenty five years the US reduces oil imports by 4% of today's figure until oil imports are zero in 2037. The federal government would hold annual auctions for the right to import each year's oil quota and use the revenue raised to reduce the tax burden in other areas. It would also be necessary to ban any increase in coal output.
Yes the resulting steady and predictable rise in the price of gas would be painful, but it would also spawn major economic growth in providing renewable alternatives. We have the technology, do we have the political will?
I don't think Americans want to be dependant on Middle East oil producers. I think a Declaration Of Energy Independence could be just as important as the original Declaration Of Independence. With the right political leadership Americans can lead the world to a more sustainable and a more peaceful future.
Reply
paulwesterberg 4:32PM (10/21/2009)
I think a 25 cent per gallon per year increase in the gas tax would have the same net effect and be easier to administer. I also think our congress is too pwned to ever pass such a law.
I think if we limit the import of oil that still leaves a lot on the table for the oil companies to continue business as usual or worse. Like you imply they would try coal gasification, tar sands, oil shale, increased coastal drilling etc etc.
wincros 4:39PM (10/21/2009)
I like it. A little antitrust action might help too.
wincros 4:43PM (10/21/2009)
I don't think the tax solution, elegant as it is, is politically possible. Nothing is hated more than taxes. It would be repealed by the next party in power.
Andy 10:46PM (10/21/2009)
Why should the government collect any taxes?
Why not just print trillions of dollars and give it all to the banking cronies.
3PeaceSweet 4:23AM (10/22/2009)
You could simply put pictures of Chavez, Dinner jacket and the Saudi princes next to each gas station with the phrase 'Thanks for you continued support' and a counter of the dollar value of oil imports.
Lauch a carbon tax and cut income tax to compensate.
Mark Kiernan 5:01PM (10/21/2009)
How about taxes on oil company profits? Then the oil companies would pass on the tax hike to the consumer and the government would save face. Use the increased revenue to fund incentives for EVs which in turn reduce the amount of oil imported and pollution caused.
Reply
paulwesterberg 5:22PM (10/21/2009)
Oil companies would raise prices through the roof and blame it all on the administration while they laugh all the way to the bank.
Mark Kiernan 5:04PM (10/21/2009)
@wincros,
I don't understand why people hate taxes so much if they see they are going to a good cause. Sweden has some of the highest tax rates in the world but they have in-turn a transparent system, where education, health and public services are free or almost free. The Swedes also enjoy a very high standard of living due to this evil socialist scheme. ;)
Reply
Throwback 8:54PM (10/21/2009)
mark, the USA was created because of a tax revolt, among other things. Most Americans cringe when we here our government tell us they are going to tax us, for our own good. Also, not every one pays taxes, those of us who bust our ass every day to provide for our families don't want to see our money going to prop up the latest government scheme. And no, I am not rich far from it, for me it is about fairness and not burdening my children with never ending debt. I would prefer if we live within our means.
polo 10:11PM (10/21/2009)
SOME americans don't like taxes because they also don't believe the government should ensure the general welfare of the people (e.i. provide social services and ensure adequate standards of living). When we had 90% taxes on the wealthiest income equality was the lowest and wages among the middle class were high, when it got cut to 75% by Kennedy, middle income wages started declining, and when it got hacked almost half by Reagan, middle income wages stagnates...and of course we all know what happened under Bush, he cut the taxes for the wealthiest and now middle class wages are DECLINING.
The truth is more taxes, especially for those who reap the greatest benefits of this country, increases wealth and general prosperity, especially for the middle class. Lower taxes has a history of translating to lowers wages, lower living standards, and the weakening of the ability of fed and local governments to provide for the general welfare of the public. It should be no surprise "LOWER TAXES" is the mantra of the rethugs, who also happen to enjoy ballooning the deficit. They want to starve the government of income so it can't pay for social programs, while transferring what should be middle class wealth to the richest (who happen to be good lobby buddies of theirs).
Just a note: rethugs aren't against social programs per say, they're against their rich contributors being taxes to support them, so they prefer social programs be privatized and the public made to buy it on their own. In reality this is just a more regressive tax system that burdens the poor and middle class while expanding the wealth and equity of the rich, who can then get even richer by profiting off these now privatized programs. The healthcare system is a flawless example of this. If we had adequate taxes on the richest, you might be paying only 2-5% more in taxes for universal healthcare instead of at least 15% or more like now.
Andy 11:10PM (10/21/2009)
Echo that polo...
You forgot to add that our capitalist society by it's very nature develops monopolies. If left unregulated by government or unchecked by society, all the money and power will inevitably end up with a few individuals.
The general public understood the negative consequences better a long time ago. Government broke the monopolies of the robber barons before society revolted. In the last 30 years regulations has eased.The pendulem has swung back and allowed the modern day reincarnation of robber barons to flourish. (e.g. Microsoft, Chevron, Exxon and Goldman Sachs)
If you wish for lower taxes and less government regulation you might just get what you wish for. It won't actually be what you want, unless you are already that big hitting top dog.
Reply