Will end of incentives really "kill" electric vehicle market?

Nissan Leaf photo
CC BY 2.0 Sami Grover

Electric cars and plug-in hybrids are becoming an increasingly common sight on our roads. Currently, their presence is being subsidized by generous state and federal tax incentives. (New York state just launched a new rebate program, for example.)

But those incentives won't last forever. Indeed, regardless of whether Donald Trump's pro-fossil fuel politics ends up directly hurting electric vehicles, we certainly shouldn't expect an uptick in support. And even existing Federal tax rebates are limited to the first 200,000 vehicles for any one single automaker.

So, at some point, electric vehicles will have to stand on their own two feet.

Now according to Edmunds, the end of incentives could very well kill the electric vehicle market in the US. Pointing to the case of Georgia, Edmunds notes that sales went from 17% of market share to just 2% when state incentives expired.

John Beltz Snyder over at AutoBlog Green is not so convinced however. Commenting on the Edmunds report, he argues that a combination of cheaper batteries, longer range and a stronger residual value for used plug-ins (subsidies currently suppress resale value) should mean that electric vehicles can weather any storm from an incentive phase out.

These points are almost certainly true. Indeed battery costs are dropping so fast that some predict electric vehicle dominance within a decade. But Beltz Snyder's article also misses one too often overlooked element of electric vehicle ownership: with the exception of one (admittedly significant) factor, plug-in cars are, quite simply, a better product for most of our automotive needs.

As I've noted in my occasional posts on life with a used Nissan Leaf, it's hard to imagine going back to a gas-only car having experienced the convenience of charging at home, the economics of lower maintenance and fuel costs, and the comparative superiority of driving experience too. Add to that the fact that a growing number of us would quite like to not ruin the planet for our children, and I suspect that we are underestimating how many people would be willing to pay a premium for what is—I believe—a superior product.

That said, range is currently a drawback. Even if most of us rarely drive more than 60 miles in a day, perceived range anxiety does keep many from taking the plunge. But I suspect this too is changing. As longer-range electric vehicles become more common, and more affordable, and as neighbors talk to neighbors about their experiences with real world plug-in driving, range anxiety will gradually cease being an obstacle.

It seems to me that every week or two now, I am asked by a friend or acquaintance about my experiences of driving electric—and the enthusiasm I detect from questioners suggests they are more than ready to give up subsidizing Big Oil. I have no doubt that there is significant pent up demand for affordable, practical electric vehicles. And I suspect that demand—coupled with lower costs and continued technological advancements—will more than make up for the death of incentives.

Tags: Electric Cars | Electric Vehicles

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