EVs are great, when it’s not you paying for them

Electric vehicles have slowly been gaining popularity in recent years, and the Australian federal government has been offering subsidies to encourage their adoption.

However, when we look at the cost of these subsidies compared to the amount of carbon dioxide emissions they prevent, it becomes clear that EVs are a poor investment for the government. Many of them are great to drive, and they’re well-made, and they’re fun, but they’re not going to save the climate.

So why do we continue to subsidize them? Why do governments who are normally stingy handing money out so keen to do so on electric vehicles?

Why governments are happy losing money on EVs

Voters love free money

One of the main reasons the government supports EVs is that they are popular with voters. Many people see EVs as a way to reduce their carbon footprint and contribute to a cleaner environment. By subsidising EVs, the government can show that it is taking action on climate change and appeal to environmentally conscious voters.

It’s hard to hand money to wealthy voters

Another reason the government subsidizes EVs is that they are primarily purchased by wealthy voters. There aren’t many ways to provide benefits to wealthy voters without alienating other segments of the population. By offering subsidies for EVs, the government can give a financial boost to wealthy voters without drawing too much criticism from the rest of the electorate.

Gotta do something…

The federal government doesn’t have many direct levers to control climate emissions. Much of the power to regulate emissions lies with state and local governments. By subsidizing EVs, the federal government can show that it is taking visible action on climate change, even if the cost-effectiveness of this action is questionable. It’s got voters who expect it do something in this space, and they can’t really do much, so what are you going to reach for?

While subsidizing EVs may not be the most cost-effective way to reduce carbon dioxide emissions, there are several political reasons why the Australian federal government continues to do so. EVs are popular with voters, especially wealthy ones, and subsidizing them allows the government to show that it is taking action on climate change, even if its options are limited.

The maddening thing about this government’s love affair with EV subsidies is that this kind of money we’re throwing at it is the kind of money that could actually make a big difference, if it were directed into the right places.

It’s not like that discount off the cost of your car is cost-free. That cost is what’s not going to science, innovation, agriculture, forestry, manufacturing… the kinds of things that are stubbornly difficult to decarbonise, or the things that will help us do exactly that.

Your car’s great, though. You’re very eco-conscious for having it. It’s just a shame it came at the cost of actual climate action. But hey, feel good.