Learning From Diesel's Failure: Government and Producer Policy Surrounding Hybrid and Electric Vehicles

This paper will examine the role subsidies have played behind diesel’s market share decline in relation to hybrid and electric vehicles as well as the deadweight loss they produce. In many respects, the near widespread integration of hybrid vehicles into the automobile market parallels that of diesel’s past integration; diesel cars were given subsidies as they were seen as a fuel efficient and environmentally friendly option, similar to the way in which hybrids are marketed today. This premature acceptance of hybrid vehicles has led to technological deficits in the production of batteries, manifesting in current environmental destruction. The aim is to provide a pathway in which hybrid vehicles don’t suffer the same fate as the diesel and can facilitate a clean and efficient transition to an electric, net-zero society over the coming half-decade.