“Come on down to Crazy Dalton’s Car Lot! We’ve got hybrids so cheap, we’re almost giving them away! We’re selling cars that are still experimental. We don’t know if they’ll work, but we’re so craaaazzy, WE’RE PAYING YOU to buy one today!”
As the auto industry’s newest stakeholders, premiers, governors and the U. S. president are rushing to hand out rebates and cash incentives to stimulate North American car sales. It’s putting more new cars on the road, but it’s also becoming increasingly and disturbingly clear the only difference between the government’s pitch, and the iconic car salesmen with the outrageous giveaways, is the plaid jacket.
The leading candidate for salesman of the year is Ontario Premier Dalton McGuinty.
In an obvious effort to protect his province’s 12 per cent stake in General Motors (shared with the federal government), he recently announced “the world’s best and biggest rebate program.” He’s offering up to $10,000 to consumers who buy a plug-in hybrid or electric car after July 1, 2010.
Of course, partially disguised in this salesman’s rhetoric is that the only car to fit the criteria for the $10,000 rebate is a GM product, the Chevy Volt.
McGuinty also wants one of every 20 Ontario vehicles to be powered by electricity by 2020, and plans to create a government fleet of electric cars.
It sounds good. That is, if rebates really do influence consumer buying behaviours, and are an efficient means for government to reduce carbon emissions.
But, they don’t, and they’re not. Researchers at the University of B. C. studied rebate programs over six years for hybrid electric vehicles in B. C., Ontario, Quebec, PEI and Manitoba. Their results, released this week, show two-thirds of those who bought hybrids were going to purchase them anyway. The rebates didn’t influence their buying behaviour at all.
Nor did the rebates lure customers to hybrids. Most were chosen over similarly priced conventional cars with low emissions and high fuel efficiency.
Rebates aren’t an efficient way to reduce emissions. Canadian rebate programs cost governments $195 to remove one tonne of carbon emissions from cars. An investment in green technology or carbon offset credits to remove the same emissions would cost from $3 to $40.
The problems with McGuinty’s rebate don’t end there. To the frustration of other carmakers who didn’t ask for handouts, it rewards GM one more time, and the money doesn’t even stay in the country. The Volt is made in the U. S. Ontario jobs are neither saved nor created.
It unfairly pushes consumers to purchase a product that’s a virtual unknown except for appearances at futuristic car shows.
The Volt has no safety record, is of unproven quality and, with a limited range of 60 kilometres on electricity before switching to gasoline, of questionable practicality. And, can Ontario’s overtaxed power grids handle the new demands?
U. S. President Barack Obama’s “cash for clunkers” bill has been wildly successful in draining federal coffers, but far less successful in getting Americans to buy environmentally friendly vehicles.
Since June, $1 billion in rebates have been given consumers who trade in old cars for more fuel-efficient vehicles. But the improved fuel efficiency required for the rebate is minimal; buyers of new trucks and SUVs get $3,500 if their new vehicle gets just two miles per gallon more than their older model.
With such standards, most consumers are simply trading in their vehicles for newer models. There’s no green incentive, but the money’s gone and Obama is asking the Senate for $2 billion to top up the fund.
Rebates don’t help the environment, they might not save Canadian jobs and, by encouraging us to invest large sums in an unknown and depreciating asset, they aren’t even there to help us.