There's something to be said about capitalism and letting the market determine what will succeed and what will fail. If people like something or need something, they will buy it. They don't need incentives or prodding from the government. On the other hand, if government steps in and subsidizes something that people don't want, guess what we get? That's right... a big pile of wasted money. Just look at what's going on with GM's Chevy Volt.
As reported by Reuters, "Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds." Can you believe that? But GM keeps building them? The question is, why?
According to the news story, the base price for a Volt is $39,995. But the cost to produce one is closer to $89,000.
The lack of interest in the car has prevented GM from coming close to its early, optimistic sales projections. Discounted leases as low as $199 a month helped propel Volt sales in August to 2,831, pushing year-to-date sales to 13,500, well below the 40,000 cars that GM originally had hoped to sell in 2012.
Out in the trenches, even the cheap leases haven't always been effective.
A Chevrolet dealership that is part of an auto dealer group in Toms River, New Jersey, has sold only one Volt in the last year, said its president Adam Kraushaar. The dealership sells 90 to 100 Chevrolets a month.
Part of the problem is the Obama administration's hands on the throat of GM. By having so much influence, the normal metrics that determine if a car will continue to be developed and marketed are completely thrown off. Obama's "green energy policy" provides a $7,500 tax credit to people who buy a volt. Not only is the Obama administration pushing for a car that Americans don't want, but Obama is using the tax code to try to pick who wins and who loses. The American people can do that without government interference.