The madness of sales quotas

The latest political pygmy tactic to get people to buy things they don't want to buy is to force companies to sell them to them. It's not going to work, as I argue in The Critic.

 

The government has given up trying to persuade us that heat pumps and electric cars are better than the real thing. Subsidies haven’t worked so it is now time for mandatory quotas. From April next year, boiler manufacturers will be told how many heat pumps they have to sell and will be fined £3,000 for every unit they undershoot the target by.  60,000 heat pumps were installed last year, mostly in new builds. Under the laughably named Clean Heat Market Mechanism, the industry will have to install 60,000 heat pumps in existing homes in year one and the target will rise to 450,000 by year four. Companies such as Worcester Bosch, who know more about the home heating market than politicians do, say that this is totally unrealistic and, treating the fines as a cost of doing business, are increasing the price of their boilers accordingly. 

In January, the zero emission vehicle (ZEV) mandate will come into effect, compelling car manufacturers to ensure that at least 22 per cent of the vehicles they sell are electric. The target will rise every year until it hits 80 per cent in 2030. For every electric car they fail to sell, they will be fined £15,000. With electric vehicles currently making up 16 per cent of the market, there will be a lot of fines.

Say what you like about Soviet apparatchiks but at least they only had production quotas. They didn’t have sales quotas because even they couldn’t force people to buy things. People don’t want heat pumps because they are big and expensive and don’t keep you warm. They don’t want electric cars because they don’t have anywhere to charge them and the national charging infrastructure is inadequate. This may change in the future, but it isn’t going to change very soon.

Continued here.