Home Business Just Say No To Gigafactory Subsidies

Just Say No To Gigafactory Subsidies

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There are indeed times when a government subsidy to some activity or other is necessary. We’re not going to have much of a Royal Navy – not that we do have much of one with subsidies – without at least some governmental attention. It’s also possible that a little legal trick or two will produce the revenue stream necessary to allow the private sector to provide the goods or service. The legal system whereby a ship calling at a British port paid lights dues allowed the private sector to build lighthouses. It being understood that those who just sailed past got the light for free but, well, problem solved anyway, even with the free rider problem, so off we go and home in time for tea.

However, it is necessary to show that the subsidy is actually necessary. Instead of it being just that someone would rather like a subsidy:

Hundreds of millions needed for a British gigafactory, ministers warned

Umm, why’s that then?

Half a dozen firms are looking at plans to build battery plants in the UK in rush to power Britain’s electric car future

Oh, it’s not necessary.

We have half a dozen firms looking to build such a factory. Clearly this is something that people want to build anyway then. So no subsidy is necessary.

Ministers have been urged to back plans for an electric car battery “gigafactory” with hundreds of millions of pounds of additional spending, or risk falling behind the rest of Europe.

The £500m set aside to attract battery manufacturers is nowhere near enough according to Kevin Brundish, chief executive of Scottish firm AMTE Power, which is seeking a site for a British battery plant.

He warned that more support will be needed as it emerged that major carmakers Ford and Nissan are among six other companies considering plans to set up gigafactories in the UK.

That’s some grifter insisting that he’d very much like a subsidy, please. Rather than anyone offering an actual case for subsidy.

He said the UK would need to build four battery plants to support 175gwh of capacity to keep up Britain’s car manufacturing targets.

Cool, so four plants will be built. Or, if they won’t be built unsubsidised then we don;t need four plants, do we?

This really is all terribly simple. If we’ve competition to build these plants, people lining up to do so, then we don’t need to subsidise them. And if it doesn’t make sense to build the plants unsubsidised then it doesn’t make sense to build the plants anyway.

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