Government incentives can be an important boost for new technologies moving from the testing ground to mainstream markets, but incentives are not guaranteed to achieve intended results – and there's no promise a government can maintain support. In an era of budgetary pressures (such as now), incentives can become easy targets.
The United Kingdom is scrutinizing its electric vehicle incentives. Similar debates are taking place in the US and France. California, for example, cut its EV rebates in half recently to deal with budget and economic constraints. According to a parliamentary report, the £11 million spent on a government program to encourage the use of plug-in EVs benefited only a "handful" of consumers, many of them affluent families who used the government grants to help fund second cars. The House of Commons Transport Committee is questioning whether that was a good use of public funds.
The UK's Department of Transport offers grants up to £5,000 (approximately $8,065 US at current exchange rates) for the purchase of an electric car as part of its emissions reduction strategy. The program has also funded a network of more than 1,600 public charging points across the country. The government was expecting to see tens of thousands of EVs on British roads by 2015, and independent forecasts think it could hit six figures by 2020. So far, the numbers haven't been good – 1,052 eligible cars were registered last year, up from 111 in 2010. As for charging stations, only 500 of the 1,600 units have been installed so far, which could be another barrier for adoption.
Government EV incentives have been in place in major markets around the world, including China, India and Japan. There has yet to be a country celebrating victory on this front, but it's still early in the game. Experts say that it's going to take sticker price reduction, charging station ubiquity, driving experience and more "keeping up with the Joneses" social influence to succeed. Until then, government incentives are being urgently requested by automakers and industry associations.