Once again, going green has taxpayers seeing red. This time however, billions in federal subsidies for electric vehicles are going those who need them the least: the 1 percent.
According to the CEO of General Motors, the average annual income of buyers of the Chevy Volt is $170,000. Those who buy the luxury electric Fisker Karma or Tesla roadster earn more than $250,000 a year. Yet every wealthy buyer receives a hefty handout from Uncle Sam, adding more than $7,500 to the federal debt for every car sold.
"Politicans love to get in front of something they think is the future, the problem is they do it poorly, they waste money and they just don't have an impact on the overall economy," says economist James Hohman of the Mackinac Center for Public Policy.
When all the federal and state subsidies to General Motors and its Volt suppliers are totaled, Hohman estimates each Volt sold costs taxpayers as much as $250,000.
"If you're wealthy enough to afford one of these electric automobiles more power to you," but Hohman says the handouts and tax breaks simply transfer wealth from the poor and middle class to corporations and the rich who can afford cars that cost as much as a small home.
"First technologies are always expensive," says Jeffery U’Ren, a Volt owner and member of Plug In America in Los Angeles. "Early adopters like me are willing to pay high prices because I love the car and I want to see the cars flourish. Then the prices will come down."
Most experts say the Volt is a tech wonder. It won numerous engineering awards and owners give the car high ratings. Problem is, it’s hardly a marketing success so far, with sales roughly 25 percent below initial targets.
In 2009, a task force for President Obama concluded, the Volt "will likely be too expensive to be commercially successful" yet the President did not cancel the project despite buying into the company in bankruptcy.
Unlike Toyota, which took a $15,000 loss on every Prius sold beginning in 1997, GM let federal taxpayers absorb much of the loss, and analysts say there is no indication GM plans to immediately mass market the Volt.
Environmentally, experts also say the car does not measure up. Fueled in large part by electricty generated by fossil fuels, the industry has not figured out how to dispose of 500 plus pounds of the highly hazardous lithum batteries per car.
Volt supporters are not deterred.
"The electrification of the automobile is a foregone conclusion," says U’Ren. "It's just a matter of how fast it happens and when. So for the United States, we need to do all that we can because we're the biggest oil consumer in the world."
In announcing billions in subsidies, President Obama hoped the U.S. would be the first nation to drive a million electric cars by 2015. That figure appears detached from reality. JD Power and Associates estimates just 100,000 eletcric cars on the road by 2020. That is less than .01 of the 300 million cars registered in the U.S., and a drop in the ocean of oil consumed here annually.
But electric car industry advocates say it’s a long road, and numbers are highly volatile based on the price of gasoline. They also take exception to Hohman's numbers, saying they are based on only one year's sales, where as the taxpayer investment in manufacturing and design of the Volt will pay dividends for decades.
"We're just at the beginning of this," says U’Ren. "The Chevy Volt was just test marketed with a limited number of cars. They just recently ramped up to full production."
Fox News number crunched all federal subsides provided to the electric car industry. They totaled $6.5 billion, including subsides to the car battery industry, as well as manufacturers. That subsidy cost taxpayers earning $30,000-50,0000 about $11. Those making over $250,000 paid much more - almost $800.