The U.S. government continues to incentivize car makers

Since the multi-billion dollar auto bailout during the 2008-2009, the U.S. government is continuing to provide incentives for auto manufactures to make more fuel efficient vehicles. The U.S. regulations require cars to deliver 54.5 miles per gallon by 2025. The Federal government’s incentives to car makers totaled $8.4 billion to date. Incentives come in with a very low interest loan around one percent from the U.S. Treasury Department’s bank known as the Federal Financing Bank under a program called Advanced Technology Vehicle Manufacturing. Loans have been guaranteed by the U.S. Department of Energy.

Under the incentive program Ford Motor has taken $5.9 billion to upgrade auto plants throughout the United States; $1.4 billion by the Nissan Motor to retool a factory in Tennessee; $529 million by Fisker Automotive who makes a luxury plug-in; $465 million by Tesla Motor to also develop a plug-in; and others have taken advantage. An additional $50 million has been awarded to a company to develop a gas-powered vehicle.

The critics say incentives to car buyers such as the $7,500 credit for hybrids and plug-ins would have produced more benefits rather than incentivizing the manufacturers. Another incentive that worked in the past is the cash for Clunkers program.

New lineup of sports cars from Porsche

Sports cars provide the fattest profit margin in the auto industry. Porsche is intending to stay competitive in the field and coming out with sports cars to cater to the power hungry enthusiasts. Its 918 Spyder, an $845,000 limited-run hybrid supercar will be available next year. This will be its most expensive car ever. Another $250,000 model will follow the 918 Spyder. It is anticipated that Porsche will be competing with similar supercars such as Ferrari 458 Italia and McLaren MP4 – 12C. Porsche’s lineup also includes a compact SUV called Macan which will be rolled out in 2014.

In order to survive the very competitive auto market, traditionally sports car makers such as Porsche are looking to promote non-sports vehicles. The 2009 Porsche Panamera and Cayenne SUV are the result of this.

True Porsche sports car enthusiast are afraid that Volkswagen’s attempts to purchase the remaining 50.1 percent that they do not own may push the Porsche to produce more popular brands rather than concentrating on sports cars. In order to address this, Porsche is equipping the 918 with 570-horsepower V-8 with an electric motor that will go 0 to 100 kilometers in three seconds in par with similar Lamborghini.