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Green car subsidy helps those who don?t need it

  • Cars in a parking lot

What do we know about Cadillac?s ELR coupe, which General Motors unveiled at the recent North American International Auto Show in Detroit?

For a start, it?s a deluxe version of the Chevrolet Volt, a plug-in hybrid with the same 1.4-litre gasoline engine and 16.5-kilowatt-hour lithium-ion battery pack, but a slightly larger electric motor, better suspension and other tweaks to slightly improve performance.

The aggressive, angular style is unmistakable. Since it?s a Cadillac, it?s also chock full of luxury goodies, including ?cut and sew accented leather,? a super stereo and an ?auto-glide/power-assisted covered storage/cup holder in the centre console.?

And, Cadillac?s global vice-president, Bob Ferguson, pointed out, it?s to be exclusive; ?a specialized offering produced in limited numbers.?

Production at GM?s Hamtramck, Mich. assembly plant is to begin this fall, and early comments from officials, as reported by various media outlets, suggested a single, short production run.

GM eventually went fuzzy about that. Ferguson ?was merely trying to state that ELR is luxury, and luxury is not about high volume, mass appeal. Luxury by its nature is exclusive,? a Cadillac spokesperson told the Inside EVs website.

Still, there?s no getting around that aiming for exclusivity also means attempting to set and justify a high price. GM hasn?t announced the ELR?s yet, but it?s reported to be between about $60,000 and ?two Volts? ? or more than $80,000.

Which brings me to a big beef about the ELR, and the growing ranks of other luxury electric vehicles.

Last week, I proposed carmakers apply the ?trickle-down? theory to EVs ? to focus on making high-end versions for wealthy buyers to keep the niche alive until dramatic technology improvements bring battery performance way up, and costs way down.

What doesn?t make sense, though, is for governments to apply green incentives to these vehicles.

Anyone paying $80,000 for an ELR, or $67,000 to $103,000 for Tesla?s Model S, or likely $55,000 and up for BMW?s i3, or well beyond $110,000 for a Fisker Karma doesn?t need financial help.

Yet Ontario doles out its full $8,500 credit (based on battery size) to help Model S and Karma buyers over the price hump. It gives $8,231 to anyone purchasing a Volt and, since the ELR has the same battery pack, its owners stand to enjoy the same gift.

The Model S and Volt, and presumably the ELR, qualify to the maximum $7,500 tax credit under the U.S. government?s electric drive program.

Given the caps on these giveaways, the amount of money involved isn?t huge ? Ontario?s cutoff is 10,000-vehicles, so the hit won?t exceed $85 million ? but it?s substantial and a total waste.

I?ve previously cited studies that show most EV buyers are sufficiently well-heeled that the incentives play little, if any, role in their purchase decisions. Apply that to those able to consider $100,000 wheels and it?s silly and unconscionable.

Even worse, the extra weight and performance stress larded on to these prestige cars reduces their environmental benefit.

The ELR, for example, travels up to 56 km on battery power before the gasoline engine comes on to run the generator. That?s about five less than the Volt.

Its total range, starting with a completely charged battery and full tank of gas, is 130 km less than the Volt?s. That means the ELR goes into gasoline drive sooner and, when it does, has substantially lower fuel economy ? by my calculation more than 20 per cent worse ? than the Volt, itself a guzzler among plug-in hybrids.

So now, governments ? that is, we ? are bankrolling luxury and performance cars with fewer environmental benefits than cheaper models, and even those that get smaller or no incentives because their batteries aren?t hulking enough.

This truly is public policy for dummies.

  • Green car subsidy helps those who don?t need it

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