Electric car manufacturer Tesla has sold 173 cars from its retail location near Atlanta, Georgia. That sales figure is not particularly noteworthy in itself, but it’s enough to have prompted the Georgia Auto Dealers Association to file a petition to the state of Georgia to have Tesla’s dealer license revoked. The association argues that the upstart automaker violated state law by selling more than the annual limit of 150 cars from its shop. While it’s not to say that Tesla’s founder, Elon Musk, is a model free-market entrepreneur (ahem, see here, here, here, and here), GADA’s self-serving appeal would help foster an uncompetitive market environment with limited consumer choice. From Yahoo! News:
“If the dealers prevail, here’s where the nearest Tesla outlets would be, and their respective distances from metro Atlanta: Nashville: 4 hours. Tampa: 6 hours. St. Louis: Over 8 hours. How many of you would be willing to travel four hours each way just to look at one car?”
Generous auto subsidies don’t guarantee higher wages – at least, that’s the take-away from this Huffington Post piece on state subsidies for auto manufacturing plants. What’s more, a Mississippi plant is paying lower wages than it’s state incentives appear to allow.
The citizens of Mississippi–the poorest state in America–have bestowed $1.33 billion, the richest subsidy ever in the auto industry, to highly-profitable Nissan–even though Nissan is failing to provide the required number of high-paying jobs required in the deal with the state.
NLPC Staff have written their latest article concerning the bailed out company General Motors. Recently, the U.S. Chamber of Commerce has launched a new initiative called the “Free Enterprise Tour.” Ironically the company that is running the tour is non-other that the government supported GM.
The Free Enterprise site chronicles the “Free Enterprise Tour,” which would be a welcome undertaking if not for the sponsorship of bailed-out General Motors. According to NLPC President Peter Flaherty, “I don’t know who looks worse, the Chamber for not appreciating that the GM sponsorship looks silly to many people, or GM for acting like it’s a competitive company operating in a real marketplace.”
Flaherty said, “The auto bailout was not about preserving free enterprise, or even saving jobs. It was about bolstering the political power of the United Auto Workers (UAW). Today’s GM is not a capitalist success story but instead is an example of state-directed crony capitalism.”
The National Legal and Policy Center has the transcript of an interview that NLPC associate fellow Paul Chesser had on the Fox Business Network. Mr. Chesser speaks about the Tesla automaker and how they are “making profits” primarily through California emission credits.
It is likely sort of a minicamp in trade system where the manufacturers of the so-called green cards, the ones that have zero emissions or low emissions, they can get credits and sell those to the big auto manufacturers if you don’t want to make those cars. And therefore, they are capping the emissions that they have and the other auto makers can exceed them and therefore if they comply with whatever the mandate is, they buy those credits and therefore come into compliance.
The Wall Street Journal reports that federal and state subsidies are making electric car leases nearly free.
With $1,000 down, Mr. Beisel says he got a two-year lease for total out-of-pocket payments of $7,009, a deal that reflects a $7,500 federal tax credit.
As a resident of Georgia, Mr. Beisel is also eligible for a $5,000 subsidy from the state government. Now, he says, his out-of-pocket costs for 24 months in the Leaf are just over $2,000. Factor in the $200 a month he reckons he isn’t paying for gasoline to fill up his hulking SUV, and Mr. Beisel says “suddenly the car puts $2,000 in my pocket.”
Angela Greiling Keane at Bloomberg writes an article about the numbers behind an automaker that the government has given millions of taxpayer dollars:
Fisker Automotive Inc. spent more than six times as much U.S. taxpayer and investor money to produce each luxury plug-in car it sold than the company received from customers, according to a research report.
The Anaheim, California-based company made about 2,500 of its $103,000 Karmas before halting production last year, disrupting its plans to use a $529 million U.S. loan to restart a shuttered Delaware factory owned by the predecessor of General Motors Co. (GM) The Karma was assembled in Finland.
Mark Modica at the NLPC blog writes about the government’s investment in new technologies that may end up being a huge waste of money:
The worst part of this mostly-untold story is the taxpayer money that continues to be wasted on the green pipe dream. The American people were lied to about the potential for the Chevy Volt, as well as for the technology behind it. Billions of dollars were spent on grants and failed loans for production of plug-in EVs, lithium-ion batteries and charging stations. Wealthy purchasers of $40,000 Chevy Volts and $100,000 Teslas receive federal tax credits for $7,500 each. Subsidized battery makers like A123 Systems are bankrupt and government-supported, green automaker Fisker is not far from it. How are middle-class or poor Americans benefiting from any of this?
A WSJ column by Kimberley A. Strassel delves into the cronyism involved in the government loan process for automakers, showing an example of a company that was almost given loans despite clear signs they were not qualified:
For an excellent study in how green-energy cronyism works, look instead to the near miss (for taxpayers) of Next AutoWorks. That startup applied for a $320 million federal loan guarantee in 2009, promising a Louisiana factory that would produce cheap and fuel-efficient cars. Next didn’t, ultimately, get its loans.
It wasn’t from a lack of political lobbying. Emails referenced in a House Oversight subcommittee hearing this week confirm every suspicion about the degree to which powerful moneymen worked the system on behalf of their investments, pushing their political contacts to roll over Energy’s credit department.
Ed Krayewski at Reason’s Hit & Run blog writes about a case of cronyism in the auto dealer industry:
Ever since Tesla announced its plans to sell cars directly, with factory-owned Tesla Stores and Tesla Galleries acting only as display showroms, car dealers and their associations have denounced the plan.
They’ve also sued Tesla for violating franchise laws in several states–Massachusetts, most notably–and gotten laws changed in others to make Tesla’s model flatly illegal…
Mark Modica from the National Legal and Policy Center has written the following article, concerning vehicle subsidies. If policymakers are really worried about our current debt situation and our level of federal spending, then they should be putting a halt to federal Electric Vehicle subsidies that will cost the taxpayers $7.5 billion in the next few years.
The Congressional Budget Office recently reported that federal EV subsidies will cost taxpayers about $7.5 billion over the next few years. The majority of those buying costly “green” vehicles, like General Motors’ Chevy Volt, are making far more money than the average American. Why should those that can afford to buy these green toys get reimbursed $7,500 each as the nation is going broke?
[…] most of the ideological and rich folks who buy a $40,000 Volt, much less a $100,000 Tesla or Fisker, would have bought the car even without the subsidies. Isn’t it time to transition the wasteful green initiatives that beget failing ventures like Solyndra from a costly government sponsored quest to a privately-funded industry that will be based on free-market logic? While we’re at it, subsidies for oil companies can be put on the chopping block as well.