How Government Policies Are Accelerating The Transition To Electric Vehicles

Oct. 03, 2023 5:24 AM ET by CarBuzz Electric Vehicles

Change doesn't occur unless someone makes it happen, and governments the world over are doing just that.

The electric revolution is in full swing, with EVs rapidly becoming mainstream in first-world countries and showing promise even in developing nations. Driven by continuous technological advancements, this rapid rise to prominence in less than two decades has been nothing short of incredible. But government policies have also been a massive driving force behind the adoption of electric cars.

Ultimately, the end goal is a net carbon-neutral society in which personal transport doesn't leave a mark on the earth. Global warming is a reality, and if we want to leave a better world for our children and grandchildren, we need to act in Earth's best interests. While some may not agree with many government policies and strategies in this pursuit, the notion of a healthier world is something we should all support.

Here are four ways government policies have accelerated the transition to electrification.

1. Incentives For Purchasing & Leasing Hybrids And EVs

Now widely available across a multitude of states, incentives on the purchase or lease of EVs in all forms (BEVs, HEVs, and PHEVs) were pioneered by forward-thinking states like California with the Clean Vehicle Rebate Project. Since 2007, projects like this have incentivized EV purchases with cashback and HOV (high-occupancy vehicle) lane usage, making it cheaper to purchase an EV and giving you ownership perks.

In 2008, the government approved tax rebates for hybrid and plug-in hybrid vehicles and conversions, eligible for OEMs until they had manufactured more than 200,000 plug-in vehicles.

The effect of these incentives reduced the price delta between combustion-only vehicles and electrified ones, and while it largely benefited a minority, it expanded the viability of purchasing an EV to a wider demographic.

Current federal incentives offer up to $7,500 for EVs manufactured locally and with battery materials sourced within North America.

2. Federal Grants For Automakers

In 2011, the White House set aside $2.4 billion in federal grants to accelerate EV development, with the goal of having one million EVs on American roads by 2015. While that lofty figure (of cars on the road) never materialized, the federal grants still helped develop electric vehicles rapidly at a time when only one automaker (Tesla) was wholly invested.

Of the initial financial allocation, $1.5 billion was given to US-based automakers for the development of batteries and related technologies; up to $500 million was given to them for other EV-related components; and $400 million was set aside for demonstration of the tech, development of infrastructure concepts, and training of technicians and other so-called green-collar jobs.

3. Government Support For Charging Infrastructure

As many critics, both outside-looking-in and those within the automaker fraternity, have rightly said, you can build all the EVs you want, but if you have nowhere to charge them reliably and quickly, then what's the point? The road needs to come before the car, so to speak.

To that effect, the White House dedicated another $2.5 billion towards expanding EV charging infrastructure as of March 2023, topping up the $5 billion initial National Electric Vehicle Infrastructure (NEVI) program. Tesla has received a chunk of that money and, in return, has opened up a significant portion of the Supercharger network to other makes of EV, prompting nearly every automaker in the US to initiate a changeover to Tesla's NACS charge connector.

Meanwhile, other automakers have banded together to create their own charging network to rival the Supercharger one.

The goal set forth by the government is to have a million public charging stations and a reduction in greenhouse gases of 50% by 2030.

4. The Eventual Ban On Combustion Sales

By far, the most contentious facet of governmental policy driving EV adoption is legislation that aims to ban the sale of combustion-powered vehicles entirely. This is not just occurring in the US, where states like California, Oregon, and New York have put things into motion to end combustion sales by 2035, but globally. The UK and Europe have taken a similar stance with the same targeted deadline.

While these policies are not explicit in that only EVs will be allowed from that date, governments seem to be wholly focused on EVs being the most viable solution. This has drawn criticism from enthusiasts and automakers alike, with Akio Toyoda famously declaring that "In achieving carbon neutrality, the enemy is carbon dioxide, not internal combustion."

Fortunately, viable alternatives are coming to the fore, with hydrogen (both in combustion and fuel-cell form) propulsion developing rapidly and synthetic fuel becoming a potential, albeit small-scale alternative for the super- and sports car niches, as well as the ability to keep classic cars alive.

However, for the mainstream car market, electric vehicles still make the most sense and are the most efficient use of power for personal transport. In this pursuit, governments have even cut back on tightening emissions in the short term, with the EU recently agreeing not to tighten engine emissions regulations for Euro 7. Instead of forcing automakers to make cleaner combustion engines, the EU will give them a reprieve and allow them to focus the finances that would have been spent in this pursuit on developing affordable, sustainable EVs.

The Knock-On Effect

No government will ever please every citizen all the time. This is a fact of life. But the end goal of sustainability cannot be looked down upon, as it's ultimately for the benefit of Earth and all those who live upon her. It's human nature to stay in comfort zones, with combustion being a comfort zone we've occupied for more than a hundred years.

While governments are not forcing anyone to buy electric cars, the incentivization of the development of EVs means that they will proliferate automakers' lineups at a rapid pace.

Buying trends don't actually follow consumer demand. Rather, consumer demand follows product planning, and as automakers focus their lineups on electric models, they will dictate market trends accordingly.

Ultimately, if the only cars you can buy new are electric, then the bulk of the buying public - who see cars as appliances rather than passion projects - will buy electric cars. And while government policies may not have explicitly dictated the sale of only EVs, the foundations laid by policymakers globally have paved the way for an electric society.