Should Governments Give More Financial Incentives for Electric Vehicles?

Should governments give more financial incentives for electric vehicles?
Should governments give more financial incentives for electric vehicles?

There is an ongoing debate about the financial incentives offered to EVs by many governments around the world. Are they offering enough? Are they offering too much? Should the industry now be left to stand on its own 2 feet? These are just some of the many questions discussed in the media and while they are very important going forward, there is no simple answer or simple solution.

Supporting technology

History shows us that when looking to replace an existing technology with something seen as new and innovative there needs to be some form of incentive to make the switch. This was perhaps the missing ingredient from years gone by when the electric vehicle market seemed to be on the verge of success. There is no doubt that governments today are offering more financial incentives to support the electric vehicle market than ever before and perhaps the public does not see the extent to which support is there?

Consumer incentives

Consumer incentives are the very visible side of the incentive argument with many governments offering thousands of pounds in support if you acquire an electric vehicle. Some would argue this is money down the drain, as the industry is moving to mass market itself, but the fact is the more popular the industry becomes the greater the cost saving going forward, less harm to the environment and also a new tax channel for governments. As we are seeing in years gone by, governments do tend to encourage individuals and companies to acquire certain products and use certain services and then tax them to the hilt.

Will this be the case with electric vehicles as and when they become mass market?

Company incentives

It is not common knowledge but governments around the world give enormous financial incentives to those involved in the electric vehicle market. Everything from battery manufacturing to electric vehicle engine systems is supported in some shape or form. The US government itself has invested billions of dollars into the electric vehicle industry and in many ways this is perhaps the main reason why it must succeed this time. No doubt the authorities will play down this investment but the fact remains they cannot afford to fund the industry forever – an industry which has been around for in excess of 100 years.

Who will decide the success or failure of electric vehicles?

The power to decide whether electric vehicles will be a long-term success or recent movement will be seen as a false dawn seems to lay with the consumer. However, there is no doubt that governments around the world have decided petrol/diesel powered vehicles are not the future and electric vehicles/hybrids should take their place.

If you notice, many of the traditional car manufacturers have already moved into the electric vehicle industry and are starting to make waves. In many ways this is reminiscent of the electronic cigarette market where the major tobacco companies are now flexing their muscles. Innovative companies such as Tesla will prove to be a tough nut to crack but it will take all of the strength and guile of technology innovative companies to lead the electric car market in the future.