Posted on March 2, 2020 by staff

How Governments Invest In Local Car Markets


In the 20th century, a lot of changes have taken place in the automotive industry, with governments investing heavily in the sector to streamline things.

Their main is to create a conducive working environment for car manufacturers and provide more job opportunities for the citizens. Besides regulating the automotive market, here’s how governments invest in local car markets and its impact on the economy.

Electric Automobiles Grants

As the push for more electric cars on the streets as oppose to carbon-emitting vehicles take a new twist, governments are getting heavily invested in this space. A good example is the British government, which announced that they’d no longer facilitate grants for non-electric cars in the country.

Electric automobile grants are one of the best ways that governments are using to discourage the use of petrol and diesel engines on the streets in favor of electric automobiles. Experts also project that the manufacture on non-electric automobiles will stop soon, though a similar step will require lots of consultation from different stakeholders.

Giving Grants to the Citizens

Most governments are fully aware of the economic state of its citizens. In most countries, many people can’t afford to buy new vehicles for family use, even when the situation calls for it. In such cases, the government may come in to chip in and financially assist its people in purchasing new vehicles through car assistance programs or grants.

Different governments have set organizations to spearhead the development of such programs, ensuring that only deserving parties benefit. Additionally, some governments donate cars to needy citizens, though such projects normally happen annually.

Such projects are normally handled by non-governmental organizations or a body tasked to perform the same role. As such, the funds for the donations are wired to the right people after successful applications. However, the ultimate vetting rights are reserved for the donating organization.

Sponsored Research and Development

With the development of new high-end vehicles, it’s hard to avoid research. Unfortunately, research and development can be a costly process, especially for individual bodies, and that’s where the governments steps in extensively. For instance, in the US, the energy department has to spearhead technological research in the automotive industry for years. By so doing, they can encourage the investors to develop cost-effective automobiles and ease the research cost.

In an attempt to cater to the growing demand for electric cars, the government has also created a devoted body to spearhead the development of long-lasting car batteries. This government-backed project aims to achieve uninterrupted drives over long distances.

Consumer Incentives

To encourage people to buy alternative fuel automobiles, governments are providing incentives to consumers. That includes state incentives and tax breaks to cut down the selling price of electric cars. Georgia, for example, has developed an incentive program in the United States, offering a $5000 tax credit to anyone who purchased an electric car in 2015. That explains why 2% of all vehicles in Georgia are electric.

In many developed countries, the government is trying to encourage people to shift from gasoline to electric cars. That’s because old cars emit toxic fumes and increase global warming. As such, states are partnering with leading automobile manufacturers to create cost-effective cars, while others offer electric car grants.