Charles Lane - Obama's electric-car cult

Obama's electric-car cult

By Charles Lane
Saturday, October 30, 2010; 12:00 AM

General Motors' Chevy Volt is finally here, heralded by a new TV ad. "This is America, man," the narrator purrs, as the sun rises over a solitary Volt tooling along a country road. "So doesn't it make sense that we build an electric car that goes far, really far?"

The pitch is lyrical, almost religious. It asks consumers to make an economic and technological leap of faith - just as both GM and the firm's biggest backer, the Obama administration, have invested, financially, politically and psychologically, in plug-in hybrids and other electric vehicles.

How else to explain the fact that both Washington and Detroit persist in their costly electric-car project despite mounting evidence that the vehicles serve no particular purpose, environmental or economic?

Maybe it was karma, but the Volt's launch coincided with publication of a 72-page report by J.D. Power and Associates that confirmed, in devastating detail, what many other experts have found: Electric cars still cost too much, even with substantial federal subsidies for both manufacturers and consumers, to attract more than a handful of wealthy buyers - and this will be true for at least another decade.

What little gasoline savings the vehicles achieve could be had through cheaper alternative means. And electrics don't reliably reduce greenhouse gas emissions, since, as often as not, the electricity to charge their batteries will come from coal-fired plants.

The Obama Energy Department has suggested that, with the help of federal money, manufacturers can ramp up mass production and bring the price of electric-car battery packs down 70 percent by 2014 - thus rendering the cars more affordable.

But J.D. Power is skeptical. "Declines of any real significance are not anticipated during the next 5 years," the report notes, adding that "the disposal of depleted battery packs presents yet another environmental challenge."
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Nor are industry and government close to resolving the lack of a nationwide recharging infrastructure - or the vehicles' poor performance in cold weather or on hilly terrain.

Fine print on the Volt ad promises just "25-50 miles of electric driving in moderate conditions." Translation: Much of the time the car will be running on gas, just like ones that cost far, far less than the four-seat Volt's price of $33,500 (after a $7,500 federal tax credit).

In short, the Obama administration's commitment of $5 billion in loans and grants for electric cars is the biggest taxpayer rip-off since corn-based ethanol. It benefits no one but a few well-to-do car buyers and politically connected companies. Any "green" jobs these rent-seeking firms create will vanish when consumers reject their products and/or the subsidies cease.

The administration's objectives - reducing carbon emissions and U.S. dependence on foreign oil - are legitimate. But $5 billion wasted on electrics is $5 billion that cannot be used to meet these goals. And then there's the private capital that Obama's policy is attracting to this losing proposition.

J.D. Power suggests, sensibly: "Rather than rushing to commercialize [battery-electric vehicles], the industry might be better served to pursue continued fuel economy improvements in [internal combustion engines] and the mass production of [conventional hybrids]."

For a president who claims to make policy based on "facts and science and argument," lavishing subsidies on electric cars is an intellectual scandal. The J.D. Power study is hardly an outlier. It jibes with similar work by Deloitte Touche, Boston Consulting Group, Roland Berger Strategy Consultants, professor Henry Lee of Harvard's Belfer Center for Science and International Affairs, and the Massachusetts Institute of Technology's Energy Initiative.

Last year the National Academy of Sciences' National Research Council concluded: "Subsidies in the tens to hundreds of billions of dollars. . .will be needed if plug-ins are to achieve rapid penetration of the U.S. automotive market. Even with these efforts, plug-in hybrid electric vehicles are not expected to significantly impact oil consumption or carbon emissions before 2030."

Yet, like a rural voter clinging to his guns, the Obama administration brushes aside the experts because - well, who knows why? Perhaps subsidizing electric cars helps a Democratic administration make corporate welfare and tax breaks for the wealthy seem progressive. It's possible President Obama feels bound by his grandiose campaign promise to put a million plug-in hybrid electric vehicles on the road by 2015.

Or maybe Republicans aren't the only ones susceptible to ideological obstinacy and magical thinking after all.

The writer is a member of the editorial page staff. His e-mail address is lanec@washpost.com.