Assuming that safety is a problem they've addressed (the web site claims so) I'd consider buying the Tango at a lower price if it could overcome several practical issues: Ease of recharging at a remote site, more storage for trips to the grocery store with a spouse, and ease of service (don't want to send the car up to Seattle every time). I live in San Francisco where parking is a major issue and stop and go traffic is the norm. The Tango would do beautifully here if it can climb our hills!

There is one little hitch with the Tango and that is it is too costly. For current production quantities, assuming that there are no distortions in the pricing of the components that go into the Tango, it is significantly more costly than the alternatives.

The question we need to address first if there are any pricing distortions in the components. That is, are there taxes or subsidies that distort the true cost of production? I suspect that there aren't any taxes aside from the normal sales taxes etc. There may be some subsidies in terms of grants and other help from corporations and foundations. So the $80,000 price tag is a lower bound on true estimate of the social cost of the car.

The analysis of whether the Tango is a socially beneficial innovation, we need to weigh the social costs against the social benefits. The social costs (or benefits) are defined as the sum of the private costs (or benefits) plus the cost (or benefits) of any negative (or positive) externalities.

To illustrate that, suppose that the cost of building a Tango is $80K. That is the social cost if there are no negative externalities in production. Now assume that there are positive externalities in consumption. That is, suppose you could estimate the benefits of lower congestion, better environmental impact (compared to the alternative mode of transportation), etc., and suppose that was, say, $20K over the lifetime of the Tango. Then, it is alright for society to internalize that consumption externality by subsidizing the cost of the Tango by that amount.
Together with that subsidy, the price which a consumer will have to pay is only $60K.

For $60K, you can get a pretty decent car. In fact, you could get a car that is sufficiently high-tech that it is zero-emission or close to it. So even with a subsidy, currently the Tango will fail the cost over benefit test.

There will always be some who would be willing to pay a premium for the Tango mistakenly believing that they are doing the right thing. But I am not convinced that it is socially beneficial. The argument continues to be valid even if larger production quantities reduce the costs (through scale economies) by half to only about $40K.

Atanu

People who do not think far enough ahead inevitably have worries near at hand.

A good friend can tell you what is the matter with you in a minute. He may not seem such a good friend after telling.

All sentences that seem true should be questioned.

Suits and religions rupture if you force them on.

You cannot learn without already knowing.