As long as Electric Vehicles are a fad of less than 2% of the population, subsidizing them will create a nasty budget item to deal with. But it won’t break the budget. That’s different when numbers swell. Governments need the taxes they get for vehicle owners and operators. Without them they would not be able to run their lavish pet projects and generous welfare programs. And they need all this porc in order to ensure re-election. So, what will they do. Cushion a tiny fraction of rich folks from any levies at all at the cost of losing election, or make sure that they reconnect with the base by slapping equivalent taxes on everyone and end those rich toy schemes?
For more than a decade, the federal government has picked winners and losers in the automobile market by heavily subsidizing electric vehicles (EVs). Now, with those subsidies set to phase out for the largest EV manufacturers, some lawmakers are now pushing to have the subsidies greatly expanded.