In order to reduce the effects of carbon emissions from vehicles, the government has heavily subsidized the Electric Vehicle industry to provide incentives to consumers. However, these subsidies have failed to correct the existing market failure. The majority of the electric vehicles bought by consumers is from the upper-middle class as secondary vehicles, not the middle class as primary as was initially intended by the federal government. In fact, carbon emissions have increased due to increased use of electricity by EV's as secondary cars instead of primary. Harvard Law reports that EV subsidies, "disadvantage poor households in the US who... are largely responsible for delivering an EV's emission benefits."
The federal government is subsidizing wealthier households not the secondhand buyers, therefore rewarding those who don't tend to help in reaching emissions targets and ignoring, even hurting, those who have the potential to do so. Friedman defines the role of government as providing a means to determine rules, modify them, and enforce compliance. Poorer households are likely to ensure EV's are around long enough to reduce emissions and the economic incentives of the government need to reward this compliant behavior, not hinder it. Therefore, the government needs to re-evaluate its strategy of subsidizing the industry in order to encourage compliance with the goal of lowering carbon emissions and increasing industry demand to remove the need for subsidies in the first place.
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