First of all, we have to say that the vast majority of U.S. state authorities are continuing with their current electric vehicle financial incentives (with many actually increasing the amount of funds available) but some states are struggling. Connecticut, Georgia, and Illinois are just three states in the U.S. where electric vehicle financial incentives are being tapered down. Whether or not they are reintroduced in the future remains to be seen, but budgets need to be balanced.
Is this a reflection of the technology?
It would be easy to say that we are yet again looking at a false dawn for the electric vehicle sector but this would be wrong. There has been enormous government and corporate investment in the industry and it is inconceivable to even suggest it will fade away into the background as it has done before. The simple fact is, many states across the U.S. and governments around the world are struggling to balance their books during the current tight economic environment and schemes such as financial incentives to switch to electric vehicles are feeling the brunt.
Is this the end of incentives?
As we suggested above, while there are signs that some states are struggling to maintain these incentives going forward there are also many states offering further incentive packages. These incentives on the whole are likely to continue for some time to come but the fact remains that the industry will at some point need to be self-financing and self-serving. There is no way that governments and state authorities around the world can afford to fund the industry forever, although in reality great progress has been made.
It is also worth noting that at some stage governments around the world will recoup more than their initial investment when taxes and other charges come into play. These financial charges are unlikely to emerge until the industry is on its feet and moving forward. This could be 10 years away or it could happen slightly quicker but at some point governments will want their fair share of revenue going forward.
Is this a blow for the industry?
The reduction in some financial incentives cannot be seen as a positive for the industry going forward but in some ways the hard work has already been done. There are now more and more electric vehicles on the road, and sales figures have reached record highs, although there is still some way to go. The sector is now more recognised and more accepted by the general public than at any stage in its history and with extremely encouraging battery technology advances the issue of journey anxiety should soon become a thing of the past.
It was inevitable that some governments and some state authorities around the world would sooner or later run out of funding for their electric vehicles schemes. However it is also worth noting that while some states have reduced the financial incentives, others have increased theirs. The industry is moving forward, technology is certainly advancing and while there is still some way to go, the electric car industry is stronger today than it ever has been. Mass-market entry may not happen immediately but many experts believe it is inevitable after the significant investment of recent years.