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Communist China Gets a Lesson in Free Markets
But do they understand that the effects of their policy are due to the operation of a (relatively) free market? Here is a quote from an article in the Wall Street Journal, titled “Tesla says China output hits target.”
…in China, electric-vehicle sales in the country have been cooling rapidly since the government reduced most subsidies at the end of June.
Sales of alternative-energy vehicles dropped for the fifth consecutive month in November, down 44% to 95,000 vehicles. The remaining national subsidies are set to be eliminated by the end of 2020.
This effect has been noted in the United States also, where when sales of electric vehicles hit a certain quantity, government subsidies (in the US, tax credits) start to disappear. And, predictably, fewer are sold after this.
I wonder how many electric vehicles would be sold if there were no government subsidies from the start.
Published in Economics
At 12:10 in this video about Shenzhen (“City of the Future”) published in 2017, buyers of electric cars in China did receive subsidies the equivalent of $4,300 and $5,000 from the national and the city governments respectively.
Not a whole lot.
It is not a market decision, but a government quota system that is pushing EVs. If you want to drive a car in a big city in China, then electric will enable you to hit the road much faster.
Proves my point, thanks @dong. Most folks would not drive an “alternative-fuel” vehicle without government demanding it. I resent the government, which should be my “servant” (you know, that “consent of the governed” thing), becomes my master, and dictates to me what vehicle I will drive.