Would someone on minimum wage ever consider buying a new car? I don’t think that happens even with 5 times more grants, because it’s a bad investment. The thing is, people buying a new car by definition already fall into the category you think they don’t need. The fact is also that those people can only spend their money once, and electric vehicles are simply much more expensive than combustion engine cars. With a subsidy, that difference is reduced, but the buyer still pays more.
Incidentally, there is a maximum amount of €45,000 on the car’s purchase price, which isn’t much for you. People who really have a lot of money can therefore never use this subsidy, because they buy more expensive cars. It also means that automakers are now looking to produce cars below that cap when they otherwise wouldn’t have that incentive. Everyone wins, even those who buy a car without subsidies.
I’m not worried about this subsidy, it will work itself out. With only 250 million euros over 5 years, it costs “us” almost nothing. That’s about $25 per taxpayer, or $5 a year. For this we get thousands of extra electric vehicles that most likely would not have been sold without this subsidy. I’m much more worried about the second-hand market, so far very little has come out and I don’t see big changes in the near future.
