Supposedly the price of electric cars will come down as volumes increase, making the vehicles more affordable. But even if the federal tax credit increases from $7,500 to $10,000, as Obama has proposed, and other states mimic California by adding an additional $1,500 tax credit, Americans may not buy electric vehicles because of their shortcomings in size, comfort and range.
The surest way to guarantee a product's failure is to subsidize it. Over time, cars that succeeded in the marketplace have been those that were developed and commercialized without government involvement.
If a technology isn't capable of succeeding on its own economic merits, there's no amount of taxpayer support that will ever make it a commercial success.
Mark J. Perry is a professor of economics at the University of Michigan in Flint, and a scholar at the American Enterprise Institute (www.aei.org) in Washington.
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