Another simple option is actually taking into account all (or at least most) market conditions when drafting regulation / market rules. E.g. going beyond instantaneous price of energy (which unfairly favours solar) but instead incorporating grid stability as well.
Also I don't understand your point about "subsidising R&D but privatising the profits". If the government wants something to happen, surely they should pay for it? (In this case, development of EV.) And as we know, private industry is more efficient at doing stuff than governments, so surely it's better to let private industry do the R&D, rather than sink the same (or more, as usual with government projects) amount of money into R&D but get worse outcomes.
If an industry is profiting by pushing the cost of their pollution onto society, surely the polluting industry should pay for it?
Companies serve at the whims of civil society, not the other way around. Society generously allows companies to exist, not the other way around.
It's not our job to come to car companies, hat in hand, and bargain for them to please not destroy our planet. Instead, it's their obligation to not destroy the planet.
If companies don't want to invest in their future business, they're welcome to cease existing in the future. We call this creative destruction, and it makes room for newer and better companies to take their place.
But since we agree they're just serving a need, maybe let's not pretend that this automatically gives them the God-given right to destroy the planet[0], and that the regulators are being unfair by taking it away?
You might re-read my post above. I cleaned it up a bit, so maybe my intent is more clear now.
[0] if it helps, substitute the phrase "other people's property" here
I presume "naturally" is a euphemism for "subsidize the R&D, privatize the profits." I am shocked (shocked!) that a company might favor this option. ;)
The big problem in your example is a government choosing winners and losers by technology. Instead, a carbon tax should be used to tell us what to achieve (lower greenhouse emissions) and let the market decide the most cost-efficient way.