[Re: Elon Musk calls for US govt to scrap EV subsidies, yesterday]
Of course Elon Musk doesn’t care for subsidies. The cheapest Tesla car – the Model 3 – costs $38,000 and the Model X can be as pricey as $126,000.
The proposed US subsidies – which will be in the region of $4,500 – would barely make a dent in the marketability of his cars, but may well encourage the take-up of Tesla’s competitors.
Subsidies work in bringing down the cost of products and steepening the innovation curve.
The two success stories in decarbonisation in the UK – in offshore wind and EVs – have been propelled by the Contracts for Difference in the case of the former and the EV Grant in the case of the latter. Government stepped in to share the burden of the costs, to incentivise competition and market demand.
If Mr Musk was as hell-bent on decarbonising surface transport as he proclaims, he would welcome this $2tn US spending package to support electric vehicles.
It is the most extensive package for electric vehicles in history and it would likely be a game-changer for surface transport decarbonisation across the pond.
It may well bring down costs and allow market challengers to rise up and compete with Tesla – something which is urgently needed.