Unfounded Attacks on Electric Cars Endanger American Jobs

Oil v Volt Subsidies.JPG

Congressman Issa recently called a hearing to accuse the National Highway Traffic Safety Administration (“NHTSA”) of a cover up related to its now closed investigation into the post-crash fire risk posed by the Chevy Volt’s lithium-ion batteries.  Issa’s theatrics only revealed that such batteries have caused zero real world vehicle fires (a regrettably common occurrence for gasoline vehicles), and that both NHTSA and the independent Insurance Institute for Highway Safety intend to retain their highest possible safety ratings for the Volt.  Nonetheless, various talking heads continue to perpetuate the myth that electric cars are bursting into flames on our nation’s streets.  This deceit hurts American workers and consumers, and only helps Big Oil.

Former GM Vice Chairman Bob Lutz, a conservative Republican himself, has dismissed attacks on the Volt by Rush Limbaugh, Bill O’Reilly, and Lou Dobbs as “totally irresponsible journalism.”  Even though NRDC and Bob Lutz have very different opinions regarding climate change, we agree that the “deliberate misstatement of facts” intended to undermine electric cars hurts the workers who build the Volt in Hamtramck, Michigan, and the workers across America who supply more efficient vehicle technology.

In addition to misleading the public into believing electric vehicles are unsafe, talking heads appearing on Fox News, The Drudge Report, Lou Dobbs, and others, are touting a report claiming every Volt sold is the benefit of $250,000 in government subsidies.[1]  This figure even made its way into the opening remarks of Mr. Issa’s Congressional hearing.  But financial analyst, Anton Wahlman, writes in The Street, “There is a fundamental flaw behind the math in this ‘report’ that discredits the entire report straight down to zero, in my view.”  The report argues that the Volt benefits from $1.5 billion in public support, which when divided by the 6,000 Volts sold at the time the article was written, equates to $250,000 per vehicle.

This simplistic arithmetic is meaningless.  Investments in manufacturing capacity are not recovered in the first few months of sales of a single model.  Over 40 different plug-in models will be introduced over the next several years, and while forecasts vary, even conservative estimates project over half a million plug-ins to be sold within a few years.  If a multinational oil company were to receive $10 billion in tax breaks to drill in the Gulf’s deep waters, would you argue that the first barrel produced cost the national treasury $10 billion?

Ironically, the same talking heads who are attacking the Volt are staunch advocates for tax loopholes and subsidies for oil companies enjoying record profits.[2]  In March, House Republicans voted unanimously to maintain tax loopholes for Big Oil.  In May, Senate Republicans defeated another measure to end subsidies for Big Oil, which dwarf the alleged subsidies to produce the Volt.

I apologize if you’re reading this on a small screen device, as it’s likely impossible for you to make out the little red dot, the area of which accurately represents the relative size of the alleged government support for the Volt.  I trust you’ll have no difficulty seeing the large black spot.

Given the very real deficits facing this country, it is worth asking where limited public resources should be invested.  Between Big Oil and vehicle electrification, the choice is stark.  One became dominant in the late 1800s, the other is key to the future of American competitiveness in a global economy.  One maintains our vulnerability to a volatile world oil market, the other uses cleaner, domestic energy.  Private industry has already made the choice. Virtually every major automaker, and several new market entrants, will introduce plug-in electric vehicle models over the next several years.  The real question is whether America will be at the forefront of this evolution in automotive technology.  The last time we faced a similar decision was between the gasoline engine and coal-fired steam power.  We chose correctly then.


[1] http://crooksandliars.com/karoli/fox-news-claims-each-chevy-volt-costs-taxpa, http://www.drudgereportarchive.com/drudge-report-topic/chevy+volt/, http://www.loudobbs.com/programhighlights

[2] http://www.foxnews.com/on-air/your-world-cavuto/transcript/chevron-ceo-we-pay-our-fair-share-taxes