Government Subsidies for Electric Vehicles: Impact, Effectiveness, and Misuse

2024-02-13 07:46:06

In America, you get government discounts if you drive a locally produced electric vehicle, Norway weaned its national fleet off oil by doling out generous subsidies, and the “unbeatable” prices of Chinese brands are largely made possible by subsidies. distributed by this or that government representative. We even wonder if anyone concerned regarding minimizing their environmental impact would still get behind the wheel of a battery-powered car without the cascade of cash… infused.

There is some ambiguity over the final effect and real objective of these “green” benefits. Palliative or guarantee of climate-neutral mobility? The only certainty is that the transition and obtaining the essential Paris climate agreement will require barely budgeted government support. The question systematically arises as to whether this support will then be well reasoned and correctly spent.

Flanders versus Wallonia

Should Walloon motorists be jealous of the Flemings who can park their new EV in their driveway with a discount of €5,000 (That said, there are only a few thousand out of a fleet of eight million cars and therefore only in 2024)? It depends. Apart from a hazy and overly ambitious plan for a large low-emissions zone that would span the entire region, there is no tangible enthusiasm south of the linguistic border for “plugged-in” mobility.

The electric vehicle is a company car affair, itself a Flemish affair. But this is precisely why the Flemish bonus was introduced: it should not help the middle class employee, but the private motorist to acquire their first battery car. Behind this approach lies what we call the Matthew effect, namely that the government sponsors precisely this private EV buyer who was going to get a slap on the wrist one day or another anyway. The bonus is then no longer the necessary boost, but simply the official remission of an uncomfortable negotiation at the dealership.

Flanders versus the rest of Europe

In some regions of Europe, premium charging is already in its next phase. The French and Italian governments are putting them in place in order to introduce the poorest section of the population to the varied pleasures of an ever-changing charging infrastructure. Flanders has already anticipated this development to some extent thanks to the bonus on used EVs, but in an election year the country remains anxiously silent regarding the potential leverage of a bonus for the base of the Company. It’s just that the climate issue is everyone’s business, and there is no harm in including everyone.

Furthermore, in Germany, it seems that discounts are not the only path to democratization. The Supreme Court has deprived the government of its room for maneuver in terms of bonuses: no German will receive a cent more. And suddenly it turns out that what until then was always automatically considered an “impossible attack on the market balance” occurs: Volkswagen is lowering the prices of its entire family of electric vehicles – which ” was never going to happen” – and Tesla then made a move to reduce its prices by several thousand euros so as not to lose market share. Could it therefore be that, despite all good intentions, bonuses mainly fund the coffers of car manufacturers?

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#Premiums #EVs #pros #cons

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