Subsidized Electric Bikes
- Thread starter Jay
- Start date
xyster
10 MW
Don't like it.
The more a product is subsidized, the more the demand for it. The more the demand, the higher its price inflates, until the subsidy is ultimately offset completely. Also, because we have a limited amount of money (most of us anyway
)we're willing to pay X price out-of-pocket, regardless of subsidy ($200 for a bike w/o subsidy, $500 for the same bike with a $300 subsidy). So as the previous federal reserve board chairman famously stated, "the law of supply and demand is not to be conned."
If this practice becomes widespread, we'll all be paying higher prices for our ebikes and related products. Next to taxpayers, those who don't or can't get that subsidy will be the biggest losers, also creating stratification between the "haves" and the "have nots".
The more a product is subsidized, the more the demand for it. The more the demand, the higher its price inflates, until the subsidy is ultimately offset completely. Also, because we have a limited amount of money (most of us anyway
)we're willing to pay X price out-of-pocket, regardless of subsidy ($200 for a bike w/o subsidy, $500 for the same bike with a $300 subsidy). So as the previous federal reserve board chairman famously stated, "the law of supply and demand is not to be conned." If this practice becomes widespread, we'll all be paying higher prices for our ebikes and related products. Next to taxpayers, those who don't or can't get that subsidy will be the biggest losers, also creating stratification between the "haves" and the "have nots".
TylerDurden
100 GW
Subsidies can be a benefit over the long-haul.
As demand increases, manufacturers build capacity and supply increases, offsetting the inflation of demand.
Simultaneously, other infrastructure develops to support the increase in utilization.
We see similar effect in the solar-energy field. Subsidies have spurred consumer acceptance, manufacturing has increased and prices have dropped. Laws are also changing to permit net-metering, so greater short-term returns are realized that offset the initial cost more quickly.
Subsidies prime the pump.
As demand increases, manufacturers build capacity and supply increases, offsetting the inflation of demand.
Simultaneously, other infrastructure develops to support the increase in utilization.
We see similar effect in the solar-energy field. Subsidies have spurred consumer acceptance, manufacturing has increased and prices have dropped. Laws are also changing to permit net-metering, so greater short-term returns are realized that offset the initial cost more quickly.
Subsidies prime the pump.
xyster
10 MW
I agree on this point.
But if the public money's to be spent in support of broad environmental initiatives, I'd much rather it bolster basic R&D, than specific industries and products.
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