When the market fails

It occurs to me that there are other places were the free market fails. The electric car seems like a prime example. Despite being able to make a profit from such a product car companies do not want to sell them. For instance despite the fact GM is losing money and market share they scraped the EV1 car and would not even sell the prototypes (see http://www.pbs.org/now/shows/223/index.html). The problem is that many current companies would stand to lose a lot of money. Not to mention longer lasting and more efficient cars would mean that the industry would lose money since not as many cars would brake down and need repairs or to be replaced. The same can be said about shoes. It seems unlikely we can't make shoes that can endure more than a summer yet what incentive do companies have for making them. The consumer may want it but they have the current situation and it is more profitable.

The answer seems to lie in leglislating why we want these things. The problem with non durable shoes is there is a large amount of garbage that results. If the cost of disposal of the shoes are added then in order to drive prices down companies would make them more durable. Similarly with the car. It just seems unlikely that a packaging and disposal tax can be added.