Posts Tagged ‘hybrid’
March 27th, 2012 at 2:55 pm
Mainstream Alternatives to Electric Cars

It looks like Energy Secretary Steven Chu’s 2008 musings about manipulating gas prices so people would be forced to buy electric cars was bad politics and bad economics.  The statement was bad politics because it confirms that liberals like Chu are willing to distort energy prices – Keystone XL, anyone? – to serve the environmental left’s ideological agenda.  It turns out to be bad economics because consumers have several more options available than purchasing a Toyota Prius.

In a hyper-link-heavy post, Time reporter Brad Tuttle – who makes no reference to Chu – explains that as the national average for gasoline has risen to $4 a gallon, Americans are responding by buying small inexpensive fuel-powered cars like the Ford Fiesta (40 mpg) and Chevy Cruze (36 mpg); hanging onto old cars longer by delaying non-essential repairs; and in the case of the 21-34 age group, preferring ride-sharing and public transit to car purchases.

Of course, none of these Econ 101 responses to rising prices will convince Secretary Chu and President Barack Obama to stop meddling in the market.  The White House is pushing an increase in the tax incentive to buy hybrids like the Prius, Chevy Volt, and Nissan Leaf from $7,000 to $10,000.  But this incentive disproportionately benefits hybrid buyers.  As Troy has noted, Volt owners average $170,000 in annual income; not exactly the people needing tax incentives to help make car purchases.

Still, it’s nice to see that no matter how much the experts in Washington twist policy into an endless barrage of mandates and tax breaks, consumers in a (relatively) free market are able to make their own decisions.