By on August 15, 2010


See the picture above? It’s a lady in a white car. Nothing unusual there, right? Well, not quite. For starters, the lady is a queen. A real one.

Before I clarify the picture, let me set the scene. Spain is in the middle of economic turmoil. Its credit rating was cut to AA, it pushed through a €15b austerity plan with just one vote and is having trouble overhauling its labor market (which is considered to be one of the most inflexible in Europe). So, suffice to say, money’s too tight to mention, as someone once said. Unless …

Unless you have a plan for a green mode of transportation. Suddenly, money is in plentiful supply. In the middle of trying to cut costs, the Spanish government pledged to invest €590m (that’s about $775m) into the production of electric cars. It aims to have 250,000 electric and hybrid cars on Spanish roads by 2014. Why, is anybody’s guess.

Wait, there’s more money: In addition to that, they put aside €80m to fund subsidies for electric car sales to customers. It’s for 20 percent of the vehicle, capped at €6,000. So it kind of came as an embarrassment when it was reported that when the Spanish government pledged to have 2,000 electric cars on the road by the end of 2010, figures were released that so far in 2010 only 15 were sold. The previous year? Just one. By my calculations, that works out to be roughly €39,333,333 per car. Good value, eh?

The Spanish government tried to put a brave face on. “The figures are similar to what happened in the beginning with personal computers or mobile phones,” they said via the government backed REVE electric car and wind power project, “The first models are expensive and with few options and initial sales were low.” (Not true. The first personal computers cost a few hundred dollars for a bag full of chips and resistors, and everybody said those who bought them were nuts. Which they were.) So, what’s this got to do with the picture above?

The Telegraph reports that in order to boost sales they roped in a celebrity to help. Quite a big celebrity. The lady in the picture is Queen Sofia of Spain. She was photographed driving a Peugeot iON EV whilst on holiday in Palma, Majorca. How did she describe it? “Phenomenal”. Which is exactly the word I’d use for this boondoggle.

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13 Comments on “Spain’s EV Plan Short Circuits. Royally...”


  • avatar
    Hank

    I don’t know, I think this could work. I rented an electric golf cart for transport on Catalina Island a while back while on a cruise, and look how many of those sold last year!

  • avatar
    Tosbaa

    AFAIK, iMiev would be manufactured exclusively by Mitsubishi and badged as a Peugeot and Reve is in fact a Th!nk City. (i.e.Norwegian) Both are inadequate (i.e. rubbish), both will be imported for the foreseeable future. Thus, this won’t help Spanish “labour market” So, what is the point other than gaining political points from “green voters” ?

  • avatar
    probert

    Could you decode “flexible workforce’ for someone not inculcated with upper management arcana. Does it refer to how low and long someone must bend over to get a job?

    Also @Hank: your story is touching and the analysis is acute.

    • 0 avatar
      ihatetrees

      Spain problems are, but not limited to
      A) Bureaucratic difficulty in dismissing workers
      B) Very generous unemployment benefits with lax obligations about taking new work
      C) Mandatory severance

      If you dig into investor and market friendly web sites, you can find more.

    • 0 avatar

      (C) is so bad that no small business can afford to fire anyone. If you fire a loser, you go bankrupt. Then everyone else is on the street too. It is a calamity that Americans just cannot imagine. Basically, the culture of entitlement laid waste to whole country.

    • 0 avatar

      Well, that certainly explains Princess Michelles junket to Spain… Fact-finding trip on wasting money on friends.

    • 0 avatar
      M0L0TOV

      Besides, Spain not having a “flexible labour market”, one of the main issues is lack of tax revenue. Most Spaniards work a piss job (minimal hours) and work a second job where they get paid under the table. I think it’s a whole Mediterranean thing since the Portuguese, Italians, and Greeks tend to do the same.

  • avatar
    Robert Schwartz

    Coming soon to a bankrupt country near you.

  • avatar
    Daanii2

    Reminds me of my own wonderful state of California. In serious financial difficulty. So we build windmills and help all the rich buy electric cars. Hows that working? Brilliant!

  • avatar
    UnclePete

    I’m impressed that the Queen can drive. How many royals can/want to do that?

  • avatar
    tparkit

    Spain’s left-wing government created an enormous boondoggle in pursuit of green energy, a disaster from which it has now begun to back away:

    http://morningstaronline.co.uk/index.php/news/content/view/full/93564

    That’s why I tend to classify this announcement regarding electric cars as a feelgood progressivist gesture aimed at saving face. It won’t actually happen.

  • avatar
    russification

    there can only be one queen of Spain and 15 EVs………now everyone go to the beach for another extended holiday

  • avatar
    philadlj

    I never thought I’d see a Spanish queen driving a Japanese EV re-badged as a Peugeot. I wonder if Obama could dust her in his Volt.


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