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China isn't as willing to jump on board the idea of Chevy Volt tax credits as the Bush and Obama administrations  (Source: AP Photo)

GM reportedly sold more cars in China last year than the U.S.  (Source: AP Photo)

The Chevy Volt launches in the U.S. November 2010, priced at $41,000 with $7,500 tax credit. It will launch in China next year, priced in excess of $40,000.  (Source: Jalopnik)
Volt will cost over $40k USD when it goes on sale in China later this year

The Obama and Bush administrations saved General Motors from bankruptcy, and now as the company prepares to partially denationalize, the government will help once again to reduce the price of its upcoming EV.  For every one of its 2011 Chevy Volt electric vehicles sold, the government will give qualifying buyers a $7,500 USD tax credit (this also applies to vehicles like the Nissan Leaf).  This helps GM and its competitors to offer a more competitive price (after tax credit) and makes the vehicles potentially profitable for the company.

Critics of the tax credit, rolled out under President Bush's leadership, will likely be even more infuriated with pending proposals to bump the tax credit to as high as $10,000 USD.

For all its fortune in the U.S., GM is finding resistance to its push for government assistance in China.  China, looking to support local EV efforts, has thus far rebuffed GM's urging to adopt a level tax credit for Chinese EV buyers.  GM, which reportedly sold more cars in China last year than the U.S., is currently deciding whether to scrap plans to build a series of EV charging stations in China's urban areas.

GM China VP David Chen complains,"China is the only country that has different subsidy policies [for electric vehicles based on origin].  The U.S. government provides US$7,500 for every electric car no matter where it comes from."

As a result, the Chevy Volt is anticipated to be priced at over $40,000 USD after any applicable tax credits when it launches later this year.  This will be drastically more expensive the domestic hybrids produced by Chinese rivals.

China, no stranger to market regulation itself, recently announced an ambitious plan spend 100 billion yuan ($14.7B USD) to fund its domestic automakers.

At the moment, any EV sold in the U.S. (regardless of the country of origin) can get full tax credits.  In China, though, U.S. EVs receive unequal treatment.  

Even Japan, which long blocked auto imports from the U.S., recently caved in and offered a whopping 3.24 million yen (roughly $38,000 USD) tax rebate for those who buy Tesla Roadster EVs.  The Roadster, a luxury competitor to the Volt, currently retails for 12.8 million yen (roughly $149,200 USD) in Japan.

IHS Automotive analyst to Green Car Advisor writes, "Although the government is looking to increase the numbers of such vehicles sold in the country, it is aiming to maintain the stranglehold of locally built vehicles, and this is unlikely to change."

China's EV dominance isn't merely limited to domestic assembly, though.  The growing giant also maintains a tight grip on around 95 percent of the world's rare earth metal production.  EVs and hybrid vehicles use much more rare earth metals then standard vehicles.  And it takes years to create active mines and processing facilities for rare earth metals.  Thus, to some extent, China will be able to dictate the price of EVs and hybrids internationally.

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RE: Ummm...
By Reclaimer77 on 9/9/2010 3:30:42 PM , Rating: 1
Ok I just can no longer take part in this sickening class warfare discussion that you Liberals insist on using. The "rich" in this country pay a ridiculous disproportionate amount of taxes. And you make it seem criminal when they are given the slightest bit of tax relief. The top 1% income earners pay something like 80% of the taxes. Taxes that WE would be paying if not for them. You bemoan corporate wealth while at the same time ignoring that the U.S has the second highest corporate tax rate in the entire world.

FALSE. Bush threw a pitiance towards the middle class. For example my rebate check was roughly $1,000 if I recall correctly and I payed around $30,000 in taxes that year. And that was a one shot deal. I believe I might have received one other check for around $500.

Terrible example Jason. If you paid 30k in Federal Income taxes that year, you sure as HELL aren't middle class. You're doing a lot better than this middle class you seem to claim to represent.

I was ADVOCATING tax cuts. What I believe is that cuts to large business, which predominated the Regan and Bush Jr./Sr. years do not benefit the majority of Americans.

Taxes WERE CUT!!! For everyone. Again, this class warfare argument you use to say this side didn't get cut enough or that side got cut too much is besides the point. You're being so petty, it's really sad.

I was defending Obama? News to me!

This is what I mean by dishonest. Fit makes a comment about bailouts of GM and the Volt rebate, and you launch into a diatribe about Reagan, Bush, you even brought up Palin!!! If you don't think you're defending Obama, you're not just lying to me, but yourself as well.

Moral relativism is a pretty weak defense, but you're certainly not above using it apparently. But make no mistake, it IS a defense.

You can pretend to be impartial all you want, and feign neutrality. But when you have to dig up a dead president from the 1980's, regurgitate the same old class warfare liberal talking points, and throw in a Palin bash.. well, let's be honest here. You aren't impartial by ANY means.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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