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How Governments Invest in Local Car Markets

Contributed by Regina Muratov
December 22, 2019

A lot has changed in the automotive sector, with governments getting more and more involved to streamline the industry. There main aim is to help in the provision of a conducive working environment for manufacturers, and to provide more jobs for their people. With the West popularizing the use of electric cars, there has been a push for other continents to follow suit in the pursuit of a cleaner greener environment by ending the use of fossil fuels.

Besides getting involved in regulating the car market, we look at how governments are investing in car markets, and the impact of the same to the economy.

Car grants to the people

Not many people are financially capable of purchasing new automobiles, and governments are well aware of that. Similarly, it becomes difficult for bigger families to travel by public means, therefore, having a private car becomes a necessity. That is where governments chip in to assist the people in car assistance programs. What you're required to do is to apply for the same using the laid down procedures for consideration.

Some governments go further to provide car donations to the people, but in most cases these are limited annual donations. Public transit systems and non-governmental organizations are mainly used by the government to channel these funds to the deserving people. Though, these are different from the charity automobiles that are given strictly to the poor.

Electric car grants

Only recently, the government of the United Kingdom announced that it would no longer give grants to its people for buying cars except for electric cars. It is seen as one of the most efficient ways of encouraging its citizens to cut down on the usage of diesel and petrol cars on its roads, and to reduce deaths related to pollution. The government is also keen on banning the manufacture of these diesel-powered automobiles to force the people to stick to electric cars. By granting loans for these electric vehicles, it will be cutting down on the usage of the older car models, and eventually getting the people to tow the line.

Sponsoring research and development

The emerging trends in the automobile sector is quite costly, and it would only take the hand of the government to assist in the facilitation of these programs. For example, for many years now, the United States Energy Department has been funding research for new technology in the sector. The idea is to get a collaborative response between car manufacturers and investors to ensure that the cost of alternative automobiles is lowered significantly.

On the same line, there is a body tasked with developing car batteries capable of lasting longer periods driving on the road for electric cars, and that same technology is being funded by the government.

Buyer incentives

A number of governments are also giving car buyers tailored incentives to encourage them to buy electric cars instead of the fuel cars. These incentives come in the form of tax breaks, or state incentives that are aimed at bringing the prices of these modern cars down. Governments are also on the front line to create awareness to the public about the dangers of continued usage of fuel cars, and the advantages of electric ones.


Tags: investment | Automotive



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