Chevy Volt a Failure - GM to Layoff 1,300

I don't really understand this part of your post. People don't shop for engines. They shop for cars; for transportation. Not for the engine that runs the thing. There is a niche market for electric vehicles because owning one gives some sort of pyschic benefit, in and of itself, to a small number of people. But that isn't the majority of people who mostly make decisions based on price and convenience. And in that regard, cars with batteries and electric engines aren't competitive. It shouldn't even be a debate -- empirically you just have to look at their sales, even as they have been given subsidization to try to create a preference for them. They are way more expensive still, and they have logistical drawbacks for how a lot of people use their cars.

UNLESS that changes, they will continue to occupy a niche market.

I don't know if you are familiar with Say's Law. ... A formulation of it is what you seem to be saying in what I quoted, that supply creates its own demand. It's bunk. I won't go long post on you, but empirically the world doesn't work that way. That is true when it comes to any form of supply side economics. It's just nonsense in practice. What the government did with subsidies to electric car maker wasn't "investment." It was malinvestment, at best. If there is a viable technology there, capital would/will find its way there on its own. If there isn't, anything people have been forced to fork over to others, or as it really has played out, the debt we have incurred funding an arbitrarily-chosen technology (and in the case of government largesse, it has largely been graft, corruption, crony capitalism driving who that money has been given to) has really had the effect of steering capital away from more potentially viable technologies. We'll actually never know what was more viable as a technology, and saw its development retarded.

Also, let's say what I just said was wrong. That all you have to do is force electric cars on people as you are suggesting and it will "affect the price of oil." What exactly does that mean, because if the demand for oil is decreased, all other things being equal, the price of oil should COME DOWN. That would make electric cars a worse value proposition, not a better one.

 

Right. But that is why I have suggested that the market for electric vehicles is a niche market. Unless something changes in terms of price and functionality, it is going to remain a niche market. Just as the markets for cars powered by hemi engines or diesel occupy small niche within the larger market for vehicles. There is a small group of people who are so evangelical about driving something with a battery and an electric motor that they have created demand for a tiny market. But when you talk about the broader market for vehicles? Most people care simply about transportation, and beyond that, they are price sensitive. That is the case when it comes to most consumer products. Functionality and price matter most to the vast majority of people (forget the outliers). At the moment, electric vehicles fail on those two things. Less so on functionality than they did even just a few years ago, because the batteries are mostly higher capacity now, and even as we speak some of the German automakers are working hard to bring charging times down. But those advances came at a cost, namely that the high-capacity batteries make the cars much more expensive. That may change. Although I'll believe it when I see it. Unless, and until, it changes, what I was responding to was the comment about how EVs don't compete with gas-powered vehicles. Of course they do. The fact that they are way more costly and still come with functionality drawbacks is why EVs remain a niche market.