this post was submitted on 06 Oct 2023
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[Dormant] Electric Vehicles
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It doesn't have a real effect tho...
If they decide consumers will buy at X price, they'll sell them for X and the people willing to spend X will buy it
If there's a 7k tax credit, they'll sell it for X+7k, and the same amount of consumers will pay X and buy the same amount of cars...
The only difference is everyone is paying their share of those 7k bonuses to manufacturers.
That tax money would be much better spent on infrastructure or public transport.
Yep. EV sticker prices won't change. The government was just lobbied successfully into giving your EV rebate directly to car companies.
This. You have to get into the head of a soulless capitalist instead of a face value end user.
This is generally why i'm against subsidies to begin with. EVs are worth it without having to be propped up by governments imho.
Assuming your theory is true, you don't think an extra $7500 in pure profit will have any effect on production? If I was a company I'd try to sell more cars that have massive easy profits...
In reality, there's a whole price elasticity of demand formula that automakers will attempt to model, and they'll adjust everything they make to try and maximize profit, both now and in the future.
I agree that the money is much better spent on public transit, trains, bike infrastructure, etc, but that doesn't mean we get to misrepresent the impact of massive tax credits on the market.