Will Electric Vehicle Financial Incentives Help?

India opens up electric car market
India opens up electric car market

There is a growing opinion that it is not all down to financials that the electric vehicle market is yet to hit the mass market and appeal to the hundreds of millions of motorists around the world. Many believe that government financial incentives, albeit very helpful in the short term, are not sustainable on a long-term basis and therefore only acting as a way in which to open the door to a new industry.

Short-term pain, long-term gain

At this moment in time, the financial incentives made available to the electric vehicle market are fairly small in comparison to other tax breaks offered across the business arena. The fact is that few people have shown a real interest in electric vehicles to date purely and simply because of the reluctance to be the "first" to move to a new technology.

There are also issues with regards to journey capacity, efficiencies, and many people still have the stereotypical electric vehicle in their mind, which is nothing like that available today. While financial incentives will obviously assist the market and probably speed up the natural progression to greater popularity, it is perhaps a public relations campaign which would be best served for the industry, government and ultimately consumers?

Removing the stigma

Removing the stigma of the old electric vehicle market, which consisted of vehicles that often stood out like a sore thumb, is not easy as many car manufacturers around the world have found. Historically, many of the larger car manufacturers were literally able to dictate to their customers and the overall market - and in some cases force-feed vehicles which were not always fully appreciated in the early days.

Quote from ElectricForum.com : "There is some debate in political and public circles with regards to the subject of subsidising the purchase of electric vehicles around the world. While a number of governments already have such incentive schemes in place, as a means of protecting the environment going forward, there is a counterargument that incentivising the purchase of electric vehicles distorts the market and makes them look cheaper than they actually are."

The switchover from traditional petrol/gasoline fuel towards electric power has not been easy, has not been helped by various failures in the past and will take longer than many people had expected. The fact that the Chinese government has recently undertaken a review of the electric vehicle market and decided to implement wide sweeping changes to its approach is nothing but positive for the longer term. Indeed, many believe the government of China has been behind a number of asset purchases from overseas companies by Chinese electric vehicle manufacturers and battery producers.

Understanding an electric car

While many of us today will have a limited understanding of the traditional gasoline/petrol vehicle, the fact is that very few of us have any idea how an electric vehicle works. Despite the fact that hybrid vehicles have been around for some time now many of us are still in the dark as to how these vehicles work, often seen as something of a stepping stone from the traditional fuel powered vehicles to the electric car.

The truth is that we don't need to know the ins and outs of how electric car works, how the hybrid vehicles offer something of a halfway house between the two extremes but we do need to understand the benefits and changes. Electric vehicle technology has not yet reached critical mass, or indeed anywhere near peak efficiency perfection, but major progress has been made.

Conclusion

While financial incentives for those looking to acquire electric vehicles are all good and well, the reality is that those looking towards financial incentives to purchase an electric car will likely have already made up their mind based upon "true prices". There are more people at this moment in time who are put off the electric vehicle market because of myths, untruths and rumours than those who are not able to afford these groundbreaking, technologically advanced vehicles.

Slowly but surely, as the electric vehicle market progresses and grows, these incentives will be reduced and ultimately, they will disappear. The crossover point between significant taxes from the oil and gas industry, in relation to vehicles, and some other form of taxation from the electric vehicle sector will be a very rocky period for governments around the world, consumers and even businesses. However we are now past the point of no return and it seems inevitable that ultimately electric vehicles, and the new fuel technologies of the future, will take over the mantle held by gasoline/petrol vehicles today.