Detroit, Mich. — GM’s announcement today that the plug-in Chevy Volt will achieve 230 mpg in city driving is the latest item in its ongoing PR campaign (last fall’s headline was a 100 mpg combined city/highway rating) to convince Americans that GM is not only worth their tax money but that GM is greener than Toyota.
The Volt is also a reminder that tax credits for auto sales are likely permanent in the age of Big Green Government.
As Brother Pollowitz notes here, the debate is on as to whether cash-for-clunkers rebates on vehicles getting at least 18 mpg should be set in stone. But such subsidies are already a fixture (since 2005) on hybrid and diesel vehicles. The credits are granted on a sliding mpg scale and run as high as $3,150 for the current mpg champ, theToyota Prius. And, like Cash for Clunkers, the money is finite — the Prius subsidy runs out on October 1.
But in order for vastly more expensive electric vehicles like the Volt to be competitive in the marketplace, the feds have approved a whopping $7,500 credit. When the Volt goes on sale late next year, GM expects a base price of $40,000. Thus, the credit will bring the boxy little Chevy’s sticker within rage of a fully loaded, 50 mpg, $31,000 Prius. (Whoops — except that’s before the Toyota hybrid’s $3,150 credit. And, not lying down to GM’s green challenge, Toyota expects to debut its own 100-mpg, $7,500 tax credit-eligible plug-in in 2010).
Already in the hole to GM for $70 billion then, taxpayers will cough up an extra $7,500 per Volt sold. That’s assuming they sell, of course.
In the current $2.50-a-gallon market, the hottest selling GM car is a long way from 100 mpg. It’s the ground-pawing 2010 Camaro with unsubsidized backorders numbering in the thousands.