published Friday, February 10th, 2012

Tennessee digging in deeper on electric car subsidies

It is bad enough that the federal government subsidizes the purchase of unpopular electric-powered vehicles -- to the tune of a $7,500-per-car tax credit.

But now Tennessee is broadening our own state's subsidy for the purchase of those vehicles. Previously, Tennessee offered a $2,500 subsidy only for the purchase of a Nissan Leaf -- and only if the buyer agreed to take part in a federal study on battery-run vehicles.

But now, buyers of the Chevrolet Volt are also eligible for the $2,500 state rebate -- paid for by taxpayers, the overwhelming majority of whom have shown little inclination to buy electric cars. And it gets worse: Tennesseans who have already purchased a Volt may also get the $2,500 rebate -- retroactively -- if they take part in the federal study.

In other words, buyers can get a $2,500 state incentive to buy an electric vehicle or a $2,500 "reward" for already having bought one -- and all on the taxpayers' dime!

That's an odd arrangement, given how few people seem to want to drive electric vehicles in the first place.

In January, Nissan had U.S. sales of only 676 of its Leaf vehicle -- compared with 22,357 of its big-selling (and non-electric) Altima.

The Chevy Volt fared even worse. General Motors sold only 603 Volts in January -- compared with 26,850 sales of the well-liked Chevy Silverado.

Clearly the public is less excited about electric cars than about more traditional vehicles, even though the traditional vehicles do not yield huge tax credits and rebates for buyers.

So why are taxpayers -- at the federal and state level -- being forced to subsidize those purchases? It's because the federal government in particular is pushing costly "green energy" initiatives of various sorts, and subsidizing electric cars for a handful of buyers is part of that push.

Our "free market" -- with buyers being neither encouraged nor discouraged by government incentives to buy particular vehicles based on how "green" they are -- seems to be in "free fall."

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