Fox Uses Fuzzy Math To Attack Incentives For Electric Vehicles


In its latest attack on American electric vehicles, Fox is echoing claims that the Chevy Volt is costing American taxpayers $250,000 per vehicle in subsidies and tax incentives.

Fox's source is a wildly inflated estimate from James Hohman of the Mackinac Center for Public Policy, an oil-funded, conservative think tank known for its "low quality" research.

By the author's own admission, Mackinac's analysis uses "simple math": "I added the known state and federal incentives that have been offered and divided by the number of Volts sold." Hohman also acknowledged on Fox Business that he is "not an expert on the auto industry." But it doesn't take expertise to realize that Hohman's methodology is deeply flawed.

First, he does not take into account future Volt sales, which, as Fox Business' Stuart Varney pointed out, will substantially reduce the cost-per-vehicle number. In the coming months, GM plans to expand manufacturing plants and increase production of the Volt to keep up with rising demand from dealerships. As production and sales ramp up, the per-vehicle subsidy cost will continually drop.

Furthermore, the $3 billion figure includes a broad range of state and federal incentives not only to GM, but to any company supplying parts for the Volt. For example, it includes $100 million in tax credits and subsidies to Compact Power, which manufactures lithium ion batteries for the Volt. But the company also supplies batteries to several other automakers, including Ford, Renault, and Hyundai. Therefore, it is misleading to include the full $100 million as government support for the Volt.

Finally, the $250,000 figure assumes that the full $3 billion in subsidies that has been awarded will be spent. But as Hohman acknowledges, it is "unlikely that all the companies involved in Volt production will ever receive all the $3 billion in incentives ... because many of them are linked to meeting various employment and other milestones."

Nevertheless, Fox News and other conservative media outlets have stated flatly that the Volt costs taxpayers $250,000 per vehicle.

Fox's vendetta against the Chevy Volt is especially puzzling given the potentially large market in the U.S. for electric vehicles. According to a recent IBM study, auto executives consider electric vehicles "one of the next hot products." But in order to realize that potential, the U.S. must continue to invest in electric vehicle technology and provide incentives to enable American companies to compete in the global market.

Posted In
Environment & Science, Energy
Fox News Channel, Fox Business
Lou Dobbs Tonight, FOX & Friends, Varney & Co.
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