csense
13 hours ago
One could just as easily say "The EV market is twice its natural size because it's being unnaturally propped up by subsidies."
Are there worthier causes the government could spend that on? Or maybe not spend the money at all, to reduce the deficit and ease pressure on interest rates and inflation? It's a politically charged question.
My personal thought is that government subsidy gets the best return on investment when the market is small (so the investment / denominator is small) and difficult to operate without the subsidy (so the improvement / numerator is increased a lot by the subsidy).
Heading into 2026 the EV market is pretty established and is no longer in that regime. The subsidies scale linearly with market size. Whether it makes sense to continue investment depends on how the positive externalities scale and the ratio of marginal positive externality to marginal government subsidy.
Maybe it's worth it, maybe it's not. But you can't assume the juice is still worth the squeeze in ~2026 just because the investment was justifiable when these policies were originally established back around ~2010 or so -- especially considering a fixed credit (per vehicle) means you need a lot more squeeze in ~2026 (when there are a lot more people buying vehicles than in ~2010).
tencentshill
12 hours ago
Oil has massive subsidies from the US. It just goes to oil companies instead of the end user. Would it be better for anyone if EV and battery manufacturers get all the subsidies instead?