President Biden is expected to quadruple tariffs on electric vehicles from China in an announcement Tuesday, according to a source familiar with the decision.
I suppose that there are also some externality reasons to favor EVs over ICE vehicles, though because carbon dioxide emissions are a negative externality, for it to produce an economically-efficient outcome, you’d want to internalize that with something like a carbon tax on ICE vehicles rather than a subsidy on EVs.
I think that a subsidy probably only makes much sense from a national security standpoint, if one is worried about China controlling vehicle production.
In World War II, the US was able to leverage vehicle production capacity, and it was a significant factor affecting the war, though I don’t know how likely it is that that would be an issue today.
Like, if we get into a WW2-style long slugging match where what matters is how many people you can put on assembly lines, I suspect that China is going to have a significant advantage anyway, due to population. Like, we don’t want to get into that kind of situation in the first place.
I suppose that there are also some externality reasons to favor EVs over ICE vehicles, though because carbon dioxide emissions are a negative externality, for it to produce an economically-efficient outcome, you’d want to internalize that with something like a carbon tax on ICE vehicles rather than a subsidy on EVs.
I think that a subsidy probably only makes much sense from a national security standpoint, if one is worried about China controlling vehicle production.
In World War II, the US was able to leverage vehicle production capacity, and it was a significant factor affecting the war, though I don’t know how likely it is that that would be an issue today.
Like, if we get into a WW2-style long slugging match where what matters is how many people you can put on assembly lines, I suspect that China is going to have a significant advantage anyway, due to population. Like, we don’t want to get into that kind of situation in the first place.