American baby boomers fondly recall the day they took their first spin in a souped-up Mustang or borrowed their dad’s GTO. In contrast, Russians probably don’t wax nostalgic over their first encounter with a Moskvich or a Zaporozhets. Those forgettable cars produced in the Soviet Union were lunkish, slow and unreliable. Short on style and long on Central Planning, they failed to excite consumers, who flocked to buy U.S. and European-made vehicles the minute they could.
As recently as 2010, according to the Coalition for U.S. - Russia Trade, 34 percent of the cars sold in Russia were imported and foreign companies manufactured another 34 percent in Russia. This, despite the government’s best efforts to prop up sales and fend off competition with hefty subsidies and tariffs.
Sound familiar? In the U.S., the White House has astoundingly ripped a page from the Soviet playbook, promoting a product deemed worthy by our government overseers, but spurned by consumers. The Chevy Volt is struggling, despite Herculean efforts by the Obama administration to encourage sales – efforts estimated by the Mackinac Center for Public Policy at $250,000 per unit sold to date. General Motors, which has dubbed the Volt its “magnet around everything we are trying to do to showcase our brand,” announced last week that it was idling production of its electric car for several weeks due to poor sales and the need to rebalance inventories.
What’s the problem? First, the cost. The price tag is north of $40,000 – so high that the government has stepped in to soften the blow by providing buyers a tax credit of up to $7,500. In his 2013 budget, which called for the fourth trillion-dollar deficit in as many years, President Obama proposed actually raising that subsidy to as much as $10,000 for Volts and other new-tech cars – a plan that could cost $10 billion if he succeeds in his stated goal of launching one million electric cars by 2015.
Other problems: Apartment dwellers and other urban homeowners without their own garages and electric docking stations can't own electric vehicles. They park on the street or in public garages, which don't offer electric outlets. Consumers aren’t crazy about the poor visibility, the small size (the Volt only fits four people) and the car’s tricky braking system. Moreover, it turns out that if the temperature drops, you’re busted.
Using the heater significantly lowers the car’s range. That’s significant, since the car can only go about 35 miles before it exhausts its charge, at which point it switches over to a gasoline engine. Unhappily, the competitive Nissan Leaf runs rings around the Volt – it’s bigger, has some nifty features like heated seats that are standard (while special order on the Volt), and has better visibility.