Friday, July 1, 2011

Who's to Blame for the Electric Car?

By mid-2011, several companies have introduced either pure electric cars or hybrids. Some observers condemn President Obama for these vehicles, saying essentially that it's his fault that such items are on the market. But former GM executive Bob Lutz sees it otherwise:

The Chevy Volt — which we started on in 2007, so it was hardly a product of the Obama administration


has been criticized as a result of Obama's takeover of General Motors. But as Lutz is here pointing out, that is impossible, given the chronology of events. Lutz characterizing the public's reception of the Volt as

‘See, that’s what you get when the government owns an automobile company. They produce this silly little electric vehicle that nobody wants and then, to make people want it, they have to put a $7,500 tax credit on it. Isn’t that just exactly what you would expect from a left-wing, socialist government?’


This perception, both of the Volt, and of the tax credit, says Lutz, is fundamentally wrong:

Well, a couple things wrong with that. The Obama administration had zip to do with the Chevrolet Volt, and the $7,500 tax credit for electric vehicles was put in by the Bush administration.


Understanding what Lutz says, then, we see that Bush carries some of the blame - if not for creating the tax credit, then at least for allowing the tax credit to be created. As is common in such situations, there is enough blame to share: Bush, the Congress, and Obama. Because, although Obama created neither the Volt nor it tax credit, Obama's demands for higher fuel efficiency will warp market dynamics:

Now, with the upcoming very severe fuel economy regulations, there will be, of course, government-mandated pressure to adopt these technologies and they’re going to have to be sold to customers whether they want them or not. So that presumably will help battery companies.


Of course, it is overly-simplistic to blame either Bush or Obama for much of this: the Congress has done the majority of the damage. Too often, presidents become targets and are blamed for actions which they did not perform, which could not stop, and which were conditioned by circumstances beyond their control.