Clean over cheap energy preferred?

Shortly after Elon Musk announced the preproduction of the Model 3, demand for the new car skyrocketed. Even though the new car will not be available for distribution until late 2017, Musk reported that over 100,000 people had already preordered by the evening of March 31.

The explosion of demand for a pure-electric car demonstrates that a combination of changing consumer preferences and government incentives for clean energy may be a catalyst that pushes the American population toward combating climate change.

Consumer preferences are powerful market forces that are shifting in favor of cutting carbon emissions. For example, when gasoline prices are low, consumers tend to drive gas-guzzling cars. However, heavy demand for Tesla's all-electric Model 3, in spite of current low gasoline prices, demonstrates that a shift in consumer preferences may have occurred. If people are choosing to purchase electric cars over a cheaper gasoline option, then preferences for clean over cheap energy may be growing.

Furthermore, the unprecedented demand for a car still over a year away from production demonstrates that government incentives can render clean energy products more attractive to the general public. The first 200,000 purchasers of the Model 3 can expect to see a $7,500 tax credit from the government, drastically cutting the price of the $35,000 car and making it more affordable for everyday Americans to choose clean energy. Since the introduction of the tax credit in the early 2010s, sales of electric cars in the U.S. have skyrocketed. While this trend is most likely due to a number of factors, including technological advances that make electric cars cheaper to produce as well as an increase in the number of manufacturers entering the market, the government tax credit is a substantial financial incentive driving consumers toward clean energy.

Jamie Cernek

Naperville