By Jim Taylor, Editor MACS ACtion Magazine
Electric vehicles and their plug-in hybrid cousins are putting governments in a bind. On one hand many governments – seeking the benefits of cleaner air and reduced fuel use – are willing to grant tax breaks or other incentives to encourage car buyers to step up. On the other hand, many governments – particularly at the state and municipal levels – can’t afford it.
Incentives of one kind or another are in place in almost every developed country, and as sales of e-vehicles increase, bean counters in every national capital and many U.S. states are looking at what they’re giving away to encourage this new market.
Additionally, in areas where EV sales haven’t been a success, governments are wondering why they set up the plan in the first place. Many countries include the purchase subsidies within their grant budgets to support new technologies, but program managers now ask if the money wouldn’t be better spent on developing more efficient products rather than helping the purchaser.
The debate is worldwide, and particularly strong in Europe where many national economies are shaky at best and every Euro counts. Germany, France, the United Kingdom, Spain and other countries are all re-evaluating their national position on providing incentives to EV buyers. Do purchasers choose the vehicle because of the incentive, or would more buy the same car if the price were lower?
The topic has also come up in this country as well, but since it’s occasionally mentioned in political campaigns we’ll steer around it here. However it is fair to say that the Federal government is closely examining the incentives and tax credits provided to buyers of electric and hybrid vehicles, and California has already substantially cut its rebates to ease the state’s fiscal crisis.
Planners and analysts are also concerned about the loss of fuel taxes as alternate powerplants allow drivers to purchase less petroleum-based fuels.
Industry observers say that the present slow-but-steady sales of EV’s in this country show that government incentives are insufficient to encourage buyers. The key to sales, they say, will be a combination of lower prices, excellent performance, and increased availability of charging stations.
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