Government has been involved in vehicle industry for a very long time. Cars are safer, cleaner and more efficient because of regulation. There are regulations around noise levels, wheelbase, warranties, lemon laws, parts accessibility among others. Manufacturers would never do this on their own since unless they all did it, like install seat belts for example, there would be a price advantage to less safe cars. Regulations level the playing field and we all benefit from safer.
As for subsidising industry with tax breaks this is exactly how industries start. Nuclear, tech, oil all start or have expansions subsidised by government. Look at farming or biodeisel which relies on many billions in subsidies. The government which represents the people (sometimes lol) decides that a viable farming industry is important to the country. They also see that whether we like it or not, EVs and alternative energy is a massive industry which will grow dramatically. The government encourages this to ensure long term economic growth and a cleaner environment.
