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[Buddy Kidd]

Obama Motors Is on Fire—Literally



Posted 01/03/2012 06:54 PM ET




President Obama's electric car vision is off to a hot start. First the heavily subsidized Chevy Volt started catching fire. Then government-backed Fisker Automotive had to recall all its cars due to a fire hazard.

Late last month, Fisker, the electric car startup that is busy spending its $529 million in Department of Energy loans, announced a recall of its entire fleet of luxury Karmas because of a faulty battery that posed a fire risk.

The battery maker at fault — A123 Systems — is another Obama grantee, having gotten $380 million in taxpayer support to make advanced car batteries.

Fisker says it's already fixed the problem, but this is just the latest in a series of troubles plaguing the new car company.

Although it once promised to be profitably churning out 1,200 cars a month by now, Fisker has so far sold only about 240 — at a price almost 14% higher than promised. And the more moderately priced electric sedan it says it will build in an abandoned Delaware plant is still nowhere to be seen.

Bad as this is, Fisker's troubles are just a taste of the expensive and dangerous mess in store for car buyers should Obama succeed in forcing the industry to bend to his green dreams.

In May, a Chevy Volt caught fire three weeks after a government crash test of the car. In follow-up tests in November, a second Volt caught fire after a test crash, and a third began to smoke and emit sparks.

GM says the cars are safe, but with only a few thousand on the road today, who can really say for sure?


The good news, if there is any, is that these potentially dangerous electric cars aren't exactly flying off the dealer lots.

Volt sales came in about 30% below GM's forecast for 2011 — in a year when overall retail car sales beat industry analyst forecasts by almost 12% — earning the Volt third place on 24/7 Wall Street's list of worst product flops of 2011.

And that's despite the substantial tax break to Volt buyers and the hundreds of millions in grant money to its suppliers. Meanwhile, sales of Nissan's all-electric Leaf have been flagging — it moved just 672 in November.

But this is cold comfort if Obama makes good on his pledge to get 1 million electric cars on the road by 2015. If government grants, loans and tax breaks aren't enough, Obama plans to force sales through increasingly tight "corporate average fuel economy" (CAFE) standards.

Issued in November, these standards will require all new cars to average 54.5 miles per gallon by 2025.

As IBD has reported, there are only two cars widely available on the market today that meet or exceed that standard — the Leaf and the Volt — which combined sold all of about 15,000 last year.

The industry admits that the only way it'll have any hope of meeting the new CAFE standard is by pushing more electric cars onto the road.

The Michigan-based Center for Automotive Research think tank figures the standards will add around $9,000 to the price of a new car. Even the administration admits they will cost up to $2,800 per car.

And they'll likely push automakers to churn out smaller and lighter cars, which every credible auto safety expert says will increase highway deaths.

Added to this, the standards will force manufacturers to rush fuel-saving technologies — including potentially fire-prone batteries — into cars before they're ready for prime time.

As Edmunds.com CEO Jeremy Anwyl noted recently, the last round of CAFE hikes in the '70s "resulted in a generation of what were often truly awful vehicles."

In other words, it's an industrial policy trifecta — government-mandated cars that cost more, are less reliable and kill more people.




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[JackA]

I was reading recently about the coming 2025 standards, which will require all new cars to average 54.5 miles per gallon. Made me think back to one of the gas scares of the '70's when I purchased a little 2 door Honda Sedan with a 2 cylinder, 600cc, air-cooled engine. Small, sure, but wait, it got 40+ MPG. Must of been those 10" Michelin tires. Driving it and looking out the window you'd be at eyeball height to a passing 18-wheeler's hubs.

Our two young boys at the time got real excited when I brought it home...they thought it was for them! My wife was so terrified of it she wouldn't ride in. Guess she didn't like seeing those big tractor-trailer tires standing taller than the car. But hey, it got 40+ MPG! In the couple thousand miles I drove it, its best never achieved 54.5 MPG, maybe 45.

Sold it and bought a 1970 Honda 750cc, 4 cylinder motorcycle. It was air-cooled too and got only slightly better mileage than the car, but WOW...MUCH, MUCH FASTER!

Can hardly wait for those 2025 Obamas to start rolling off the assemby lines.