A short circuit for electric cars
LONDON, April 16 (Reuters) – Poor old Alistair Darling. The Chancellor is girding himself to deliver a truly ghastly Budget, and lined up a crowd-pleasing headline-grabber to distract attention from the financial horrors ahead.
Then his colleague transport minister Geoff Hoon goes and grabs the headlines for himself, revealing plans to bribe motorists to ditch the gas-guzzler for an electric car.
From 2011, buyers are promised 5,000 pounds towards the cost. Smug drivers pottering along in a subsidised electric car, powered by juice generated from subsidised wind farms, can feel in perfect harmony with nature.
This is an illusion. Carbon dioxide, which is all modern conventional cars emit, is generated by electric cars too, but it’s out of sight and out of mind at the power station. In terms of the total energy needed to propel the occupants around, there is no saving from going electric.
There are other snags. Sales of the G-Wiz, a toy car which will still cost 4,000 pounds even with the subsidy, are unlikely to be helped by this*. Drivers will be reluctant to venture far from the comfort of a friendly power point, for fear of being stranded. The exotic metals in the batteries present a sitting target for thieves. If enough people go electric, the concessions like avoidance of parking and road use charges will quickly disappear.
Subsidies distort behaviour, and today’s subsidy is tomorrow’s tax loophole. Cars use valuable public space, and energy of all kinds is going to get more expensive. If Darling has any strategic sense, he will take advantage of the low oil price to raise the tax on road fuel.
But that wouldn’t be popular, would it?
((Edited by David Evans))