Should Electric Vehicles Receive Financial Incentives?

Should electric vehicles receive financial incentives?
Should electric vehicles receive financial incentives?

Over the last few years we have seen a significant increase in the number of electric vehicles on roads around the world. Initially, many motorists were concerned about range capacity but these fears seem to be fading, especially amongst those who actually drive electric cars. As the industry moves towards critical mass some are now suggesting that the financial incentives should be reduced and eventually withdrawn.

Is this a fair comment or is there more to this than meets the eye?

Cost of oil

A number of experts have highlighted the considerable subsidies and financial investment that governments around the world make in the oil industry. We only have to look at the cost of protecting oil pipelines across the world, not to mention the often favourable tax incentives offered to oil companies. While the cost of gasoline/petrol varies enormously across the globe much of the cost to the end-user is made up of tax repaid into government coffers.

So while we see the price of oil moving upwards and downwards, many people do not seem to appreciate the massive financial burden the oil industry places upon each and every taxpayer around the world.

Is this a level playing field?

It is very easy to forget, but when gasoline/petrol vehicles first hit the mass market they would have attracted significant financial incentives offered to both companies and individuals. Indeed we only need to look at the so-called eco-friendly vehicles of today to see the financial incentives still offered to gasoline/petrol cars. So while the electric vehicle market may be receiving financial assistance from governments and taxpayers around the world, this is not the only industry to receive early stage investment from politicians.

There are signs that the financial incentives which were used to kickstart the electric vehicle market are now gradually being reduced. There is still enormous investment required for the electric vehicle market but as we saw with the Tesla Model 3 launch, there is very strong demand for electric cars.

Are electric vehicles here to stay?

History shows us that electric vehicles have emerged on the scene and then faded away due to lack of interest and investment. The situation today is very different because oil is not an endless commodity and we now need to look at long-term viable alternatives. When you also add in the enormous investment by governments around the world, not to mention consumers, we have gone well beyond the point of no return.

It was interesting to see some of the gasoline vehicle companies in the US supposedly getting together to launch an attack on Elon Musk and Tesla. If they don’t see Tesla, and electric vehicles, as a threat then there would have been no reason for them to come together and work to a common goal.

Conclusion

While many have criticised the significant financial incentives offered to companies and individuals in the electric vehicle sector, this perhaps overshadows the ongoing investment and tax incentives the oil industry enjoys. Slowly, but surely, electric vehicle financial incentives will fade away and eventually the industry will be left to stand on its own two feet. At this point it does look as though the traditional gasoline/petrol vehicles of today will eventually be overtaken by their modern day more efficient counterparts.