Car Guy

Assault and GM’s $30,000 Battery

You might be allotted 200 miles between rechargings.

By 10.1.13

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The economy must be doing a lot better than all the wretched indexes (number of people no longer even trying to find work, number of people on the dole, etc.) indicate. Otherwise, GM would not have announced it is committed to developing a new electric car battery capable of moving a car 200 miles down the road… at a cost of only $30,000 per battery.

No word about the cost of the car it will go in.

The good news is, this prospective wunderwagen will be cheaper than a Tesla, which has starting price of about $70,000 -- about $100,000 for the version that can go 200 or so miles on a charge… if you don't drive it very fast.

What I want to know is who the heck is buying these things? And how many of them can there possibly be?

Thirty thousand is a lot to pay for a battery pack. And $70,000 is a lot to pay for a car -- any car.

So, I dug up some numbers.

Turns out the Tesla is the third best-selling high-end car in California (where it doesn't get too cold, an important consideration for an electric car) just behind the Mercedes-Benz E-Class and the BMW 5.

Sounds good -- and is touted that way by the moo-cows of the media. But how many cars did Tesla actually sell?

So far, about 4,714. Out of about 1.6 million cars sold in California annually.

And with regard to those 4,714 Teslas, "sold" is probably not quite the right word to describe a transaction that involves a $7,500 kickback from Uncle (who steals it from you and me first) plus another $5,000 kickback from the state of California, which of course has stolen it first from the poor fools out there who continue to buy Corollas and Camrys and so on at full-fare on their own nickel. California also throws in -- courtesy of more of other people's money -- a "credit" for installing the high-voltage charging station the Tesla needs in order to take less than several hours to re-juice itself. The charging station costs a another couple thousand for the electrician and the necessary parts.

As per Chevy Chase in Fletch, send the bill to the Underhills.

So, each Tesla "sale" costs taxpayers at least $12,500 (not counting the recharge station) in direct wealth transfer to each Tesla owner. It might be more efficient to cut Tesla the company out of the equation entirely and simply give 4,714 people "free" Fiat 500s. There could be a lottery. A new Fiat 500 only costs about $16,000 -- and though it only gets 40 MPG on the highway, it can travel an almost infinite distance on the highway -- and be refueled in minutes rather than hours -- which the electric-impaired Tesla cannot.

So, GM wants to get in on this action.

I am hitting myself on the forehead with my shoe, as I ponder the madness of it all. A madness made possible only via the insanity of government. Absent government -- and its neo-Soviet/neo-fascistic industrial policy of funneling other-people's-money into "investments" it deems worthy but which the market has shown no interest in… well, there would be no Tesla. No Chevy Volt, either.

And no demented program to design a $30,000 battery.

The Volt program is a failure of Edselian epicness. The cars are literally being given away -- $200 a month leases for two years, for a car with a sticker price of $39,145.

You do the math.

Yes, Tesla has found a few thousand well-heeled suckers for its Volt -- but even they have to be seduced with financial inducements that amount to one of the most egregious person-to-person wealth transfers ever conjured. I marvel there isn't more outrage erupting from the millions of people struggling to make their $300/month payments on Corollas and Camrys (and so on) who are fleeced so that a few thousand very affluent people can be given a pile of cash equivalent to the cost of a new economy car so that they can drive around in a $70,000 electric car. I mean, what's next? Paying people to live in 8,000 square foot McMansions so as to prop up the builders thereof?

What it comes down to is politics -- and payola.

Even though there is no real market for electric cars outside of in-city/fleet users and a few other extremely niche markets -- and no market at all (properly speaking) for $70,000-plus electrics like the Tesla, if you removed all the wealth transfer subsidies and forced its builders to sell them for what they really cost to make -- they continue to be made.

Why?

For the same reason that Ford would have kept right on building Edsels… if Uncle Sam had paid Ford to build them -- and paid people to buy them.

Tesla and GM know that their losses will be covered no matter what. That there is no downside to throwing money -- other people's money -- at projects that would otherwise never have been more than the scribblings of a madman on the wall of his rubber room.

The chickens will come home to roost though, regardless.

Tesla appears to be a success because unlike the Volt (and other electric Edsels) they are "selling" them. But not very many of them. And only courtesy of jaw-dropping direct wealth transfers. Even so, there are only so many people with the financial wherewithal to drop $57,500 on a car -- electric or not. I expect the buyer pool is going to dry up pretty quickly, once the novelty factor has worn off -- and once people find out about the car's significant functional limitations. Pretty only goes so far -- especially when the car can't be driven very fast without severely limiting how far it will go.

And GM will join the party a day late and a dollar short.

Whereupon it will stick out its hand again and "ask" for more of your dollars.

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About the Author

Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.