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Comment by teruakohatu | Hacker News Reader

That happened in New Zealand, where the govt. paid $5,000 for electric cars. When this subsidy expired, prices decreased by a few thousand.

If a consumer was willing to pay $20,000 for a car why would they sell it to them for less than $25,000 when the final bill to the consumer will be $20,000, with the govt. paying an extra $5,000.

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That's why the better policy is not to subsidize the purchase price of the car, but the various taxes associated with owning one, as well as offering certain perks like being able to drive in the bus lane. This was a huge success in Norway. Though now the percentage of new car purchases that are electric is so large that the subsidies are being rolled back because they've gotten too expensive(and the bus lane thing no longer makes sense because if the majority of cars can drive in it, it's not really a bus lane anymore). But I think that's fine. You can make an argument that when subsidies were introduced, electric cars were still struggling to compete with combustion cars in numerous ways, like range, capacity, access to chargers and repair services, etc. Subsidies/perks acted as compensation for those downsides for early adopters. The playing field is obviously a lot more even now. Chargers(including home chargers) are generally widely available, range is improved via better battery tech, there's a lot more players in the market, meaning more choice, etc. Not really a car guy, but I assume the repair situation is also improved, though it may not be on par yet.

In principle, that still injects cash into those companies though; it's just that the popular conception is that these subsidies are intended to make the product cheaper for consumers, instead of encouraging companies to produce them because they're more profitable due to the subsidy.

(This should not be taken as a blanket endorsement, god knows that companies follow the incentives, which is rarely perfectly aligned with the intent)

This is basically what everyone said would happen with Yang's proposed UBI in 2020.

Basic Econ 101 - The only way to lower prices is to increase supply (or decrease demand, however I'd really rather not have a huge pandemic, war, illogical engineered recession, or other situation that decreases the number of viable consumers...)

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