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The EV Farce And The Race For More Taxpayer Subsidies

by Ross Clark
February 07, 2024, 1:02 PM
in News and Opinion
Reading Time: 3 mins read
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ev taxpayer subsidiesWhen the electric van startup Arrival announced that it was seeking to focus its business on the US market, it seemed like a good move. Biden’s Inflation Reduction Act was offering massive subsidies for the green industries of tomorrow; the market would surely surge, and Arrival’s fortunes with it.

They did not. The “British Tesla” as it was once known, which was valued at over £10 billion on the Nasdaq at one point, has seen its UK arm enter administration. [emphasis, links added]

It follows that other darling of green industrial policy, Britishvolt, which collapsed last year (it was later bought by Recharge Industries).

It has been clear for a long time now that electric vehicles have run up against one of those concrete blocks the automotive industry uses in crash tests.

Despite huge subsidies over the years, and a tax regime that continues massively to favor owners of electric cars over petrol and diesel ones, the motor industry still struggles to shift its wares.

Last year, for the first time, the market share for pure battery-powered cars fell back from 16.6 percent in 2022 to 16.5 percent in 2023.

Private buyers lost interest a while ago, and now fleet buyers are losing faith too: the US arm of car rental firm Hertz recently announced it was planning to sell off a third of its electric vehicle fleet and reinvest in petrol.

In a sane world, this would be a signal for manufacturers to cut back production. Unfortunately, the Government thinks otherwise, and since January 1, manufacturers have been under a mandate to make sure that at least 22 percent of the vehicles they sell are zero-emission, a proportion that is due to rise to 80 percent by 2030. Fail, and they face stiff fines.

Given that people don’t want to buy these cars, it’s causing a considerable headache. The preferred solution of the car industry, of course, is simple: ask the Government for more taxpayer-funded handouts.

Industry figures are already complaining that grants for plug-in cars, which at their height offered bungs of up to £4,000 per vehicle, were phased out in 2022.

They should consider, however, that electric cars continue to enjoy substantial fiscal incentives.

Buy a litre of petrol and around half of what you pay is tax; charge your EV at home and all you pay is 5 percent VAT. Electric cars won’t even be liable for road tax until next year – after years of using the roads for free.

If your industry has this many state-mandated advantages over its competitors and still can’t persuade people to buy, the answer isn’t to double down on your lousy product and beg the Government to save you.

It’s to stop making bad cars nobody wants to drive.

As for the state, it’s time for it to step back and stop throttling the sector with ridiculous rules. How many times will we have to learn the lesson that governments waving massive subsidy cheques make for awful investors?

Throwing yet more money at the electric vehicle industry won’t make the vehicles better. They’ll keep being expensive, slow to charge, excessively heavy, and lacking in range compared to their far superior petrol peers.

The Government should end this farce.

Read more at Telegraph

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Comments 3

  1. racing games says:
    1 year ago

    Great article! That is the type of info that should be shared across the net.
    Shame on Google for not positioning this post higher! Come on over and visit my website .

    Thank you =)

  2. Ed Reid says:
    1 year ago

    “Packaging, marketing, advertising and even incentives mean nothing if the dogs won’t eat the dog food.” (HT: G. W. Myler)

  3. Sonnyhill says:
    1 year ago

    I’d like to thank the EV fools for depressing the price of gasoline.

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