Patrick Michaels looks at the Chevy Volt:
. . . GM was desperate for customers for what they perceived would be an unpopular vehicle before one even hit the road. It had hoped to lure more if buyers subtracted the $7,500 from the $41,000 sticker price. Instead, as Consumer Reports found out, the car was very pricey. The version they tested cost $43,700 plus a $5,000 dealer markup (“Don’t worry,” I can hear the salesperson saying, “you’ll get more than that back in your tax credit!”), or a whopping $48,700 minus the credit.
This is one reason that Volt sales are anemic: 326 in December, 321 in January, and 281 in February. GM announced a production run of 100,000 in the first two years. Who is going to buy all these cars?
Another reason they aren’t exactly flying off the lots is because, well, they have some problems. In a telling attempt to preserve battery power, the heater is exceedingly weak. Consumer Reports averaged a paltry 25 miles of electric-only running, in part because it was testing in cold Connecticut. (My engineer at the Auto Show said cold weather would have little effect.)
But not to worry! They’ve found someone to buy half of the total Volt production:
Recently, President Obama selected General Electric CEO Jeffrey Immelt to chair his Economic Advisory Board. GE is awash in windmills waiting to be subsidized so they can provide unreliable, expensive power.
Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced. Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375,000,000 to a company to buy cars that no one else wants so that GM will not tank and produce even more cars that no one wants. And this guy is the chair of Obama’s Economic Advisory Board?




General Motors has emerged from bankruptcy and taken initial steps to repay its federal bailout money — two good bits of news, although the taxpayer remains on the hook for many billions of dollars extended to GM. Specialty electric-car maker Tesla Motors also had a successful initial public offering and is being celebrated as some kind of testament to the entrepreneurial spirit. For Tesla, this is pure PR.
The other absurd vehicle in development is the Terrafugia flying car, which just won exemption from a federal airworthiness safety standard. Surely you will feel secure when a flying car exempted from safety standards buzzes your neighborhood, especially when you learn that another federal waiver means the pilot needs only 20 hours of experience before he or she takes off. Maryland, my state, requires 60 hours behind the wheel before receiving a driver’s license. But fly after 20 hours? Hey, wheels up! Surely few of these accidents-looking-for-a-place-to-happen will sell on the free market. So — scan the horizon for a bailout. The Terrafugia company just got a piece of a $65 million military contract to research a flying Jeep-like thing; don’t hold your breath. If patriotism is the last refuge of scoundrels, defense contracting is the last refuge of bad business plans.

