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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 YashBudini on 9/10/2010 8:53:52 PM , Rating: 2
Ever see see poor people crush a global economic system? Ever see a poor person do as much damage as the CEO of Enron? Tyco?

Face it, it's far beyond hating socialism, you're a misanthrope, and probably an omnivore as well. What's the term for someone who's sexually satisfied by their automobile anyways?


RE: Ummm...
By Kurz on 9/11/2010 11:05:42 AM , Rating: 2
So how is giving a group of people (Politicans no less) direct control of an economic system beneficial for the rest of us?

At least with the Free Market (Capitalism) choices are not centralized and highly based on individuals choosing whats best for them.

Corporations are directly supported by the government and can't exist without Government involvement. So as much as you dislike corporations they are a product of the government.

I dislike socialism because its a system that causes much more disparity reduces the standard of living, and people can never acquire the fruits of their own labor they have to share it with the rest of society.

Your claim of Misanthrope only applies to people who wish to steal my wealth for themselves. I worked for it! What have they done to get wealth for the most part nothing.


RE: Ummm...
By YashBudini on 9/11/2010 6:59:02 PM , Rating: 1
quote:
At least with the Free Market (Capitalism) choices are not centralized and highly based on individuals choosing whats best for them.

Gee that would be wonderful if we didn't live in a plutarchy.

At least with the Free-For-All Market (Americanism) choices are centralized and highly based on corporations choosing whats best for them. Just ask the K St whores.

quote:
Corporations are directly supported by the government and can't exist without Government involvement.

They're people, they should exist without the welfare they get, just like people should. Don't believe me? Ask your supreme court puppets.

quote:
I dislike socialism because its a system that causes much more disparity reduces the standard of living, and people can never acquire the fruits of their own labor they have to share it with the rest of society.

And yet when the pendulum swings to the opposite extreme you don't have a problem with reverse Robin Hood-ism.

quote:
Your claim of Misanthrope only applies to people who wish to steal my wealth for themselves. I worked for it!

So did the people who's lives were ruined by the Wall St parasites, by the CEO's of Enron, and Tyco. They all worked for it.


RE: Ummm...
By Kurz on 9/11/2010 10:23:27 PM , Rating: 2
So how does more government that comes with Socialism solve any of those problems?

Fraud is Fraud... it should and is usually punished as such.


"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher














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