People are paying for negative externalities of burning fossil fuel by paying taxes on gas.

That’s not paying for putting any of the CO2 emitted back into the ground. Maybe it’s paying for roads, or directed to a general fund, but it ain’t covering the cost of climate change caused by the emissions.

The government receives revenue from gas taxes, and they spend money on EV incentives and renewable energy, so in a way the taxes do pay for reducing CO2 emissions.

AFAIK the fas taxes are mostly paying for infrastructure (mostly roads) and often they often don't cover the costs. This is the reason why some countties are introducing similar charges for EVs. Now you could argue it's a subsidy, but to mean it seems more like an oversight.

It's because the current car industry and all of its supply chains are so dead crazy efficient, that the government can no longer squeeze any taxes out of the business without disrupting the circle.

Therefore a new, way more inneficient industry is required, which will become very efficient of course over time. Otherwise there would be no growth, measured in GDP. There is no profit in commodity unless you are a monopolist. Which the car industry given the large-scalre mergers of the past is increasingly becoming.

I don’t think this is the case. Imho, it’s a matter of EVs requiring fewer moving parts and much less labor for manufacturing and ongoing maintenance, which is going to cannibalize existing organizations, supply chains, labor arrangements, etc (not to mention related job losses in petroleum supply chains as demand for vehicles wanes). This, in turn, will cause government to have to do “real work” to manage the transition (so that you can attrition citizens out at a rate where you’re balancing cost to the nation against quality of life for those who don’t have a career path anymore). Very similar to the coal industry phasing out.

It’s going to be beautiful for the planet and humanity, but devastating to entrenched interests.