A little while back, an anecdote was being passed around by liberal folks on Facebook that made Ann Romney look pretty bad. Apparently she said that a woman in the workforce “should be happy just to be out there in the working world and quit complaining that she’s not making as much as her male counterparts.” Even by the relatively relaxed standards that are rightfully applied to the families of political candidates rather than the candidates themselves, that sounded a little tone-deaf to me. So I checked on snopes.com and, indeed, found out that the story was completely false. It was made up by a humor site, and then picked up by people who don’t like Romney, who were willing to take it at face value. As ridiculous as any particular claim may be, confirmation bias nudges us toward greater credulity when we are faced with stories that we want to believe are true.
Which brings us to the Chevy Volt, the electric car from General Motors. One of the blogs I generally read is Outside the Beltway, which is a group of conservatives who are more than willing to decry the worst excesses of conservatives as well as liberals. I generally don’t agree with them (except for the decrying), but they say a lot of interesting things. Doug Mataconis, one of the bloggers there, fell quite a bit short of that standard in a recent post about the Volt.
Mataconis, relying on an equally silly Reuters article, tells us that GM loses $50,000 every time it sells a Volt. The attitude of the post is simple — “maybe I’m no fancy businessman, but even I know that it’s not a good strategy to keep building cars and selling them at a tremendous loss!”
Well, that would be a bad strategy. So bad, in fact, that it might be advisable to pull back a bit and ask if that’s what’s actually happening.
The answer, to what should be no one’s surprise, is — no, that’s not at all what’s happening. Where does the $50K figure come from? Easy: add up all the costs that have gone into developing and building the Volt, subtract what customers have paid for it, and divide by the total sold. That’s a bizarre calculation to do, and even if one was tempted to do it, it’s blatantly dishonest to describe the result as “the amount GM is losing on each Volt it sells.”
There’s an old West Wing episode which explained this in the case of pharmaceutical companies. One guy complains that a company is selling pills for a large cost when the only cost four cents to make. The other corrects him: “The second pill costs them four cents, the first pill costs them $400 million.” With any new technology, there are development costs. But those costs aren’t repeated every time you sell a new copy of something you’ve developed. The reality is that GM basically breaks even on every Volt it sells, maybe making a bit of a profit. The idea that they should shut down production today because they haven’t yet recouped their development costs is a bit nutso.
It’s easy to explain why someone would allow themselves to believe such an obviously dubious claim: it fits into their pre-existing beliefs, and confirmation bias does the rest. What is really puzzling to me, however, is: why should anyone have such strong bias against electric cars?
I get that an individual person might not want to have an electric car. At the current state of technology, they’re both expensive and somewhat inconvenient. So… don’t buy one. I haven’t gone to a car dealership recently, but my impression is that most of the vehicles on sale are still of the cheerfully gas-guzzling variety. But why would the very concept of other people buying electric cars cause so much internal anger that you lose all sense of proportion?
Part of it is political, of course. Liberals want to stop global warming, and therefore want to encourage alternatives to fossil-fuel consumption, and liberals are bad, therefore alternatives to fossil fuels (which electric cars don’t even count as quite yet, since much of our electricity comes from burning coal…) must be bad.
But it goes beyond that. Controversy erupted between Tesla Motors and the BBC show Top Gear when the show (after saying nice things about the Tesla Roadster’s acceleration) went out of its way to give the impression that the car quickly ran out of charge and had to be pushed back to the garage, even though that never actually happened during the tests. The producers had decided ahead of time to push a gloomy line about the Roadster, and they arranged the filming accordingly.
Whether you are liberal or conservative, a fan of muscle cars or a granola-crunching hippy, I don’t see why anyone would rationally hope that electric cars will fail. It’s a fun new technology! Maybe they will never be profitable or practical, although I suspect otherwise. But actively rooting against them seems bizarre.
Then there is Mitt Romney, who says good things about electric cars, but less good things about innovative start-up companies:
So for instance, I would not be investing massive dollars in electric car companies in California. I think Tesla and Fisker are delightful-looking vehicles, but I somehow imagine that Toyota, Nissan, and even General Motors will produce a more cost-effective electric car than either Tesla or Fisker. I think it is bad policy for us to be investing hundreds of millions of dollars in specific companies and specific technologies, and developing those technologies.
(Parenthetically, I’m not sure how an American politician got away with saying that Japanese car companies might be able to do something, but imply skepticism that Americans are up to it.) Of course this is the same interview where he proclaimed his support for basic science, and the one example he could think of was … cold fusion. Platitudinous declarations of support are good, but sometimes the devil is in the details.