Starting with sports cars seems like a good plan to me. Let the people who can afford to pay a premium help fund development of the technology which can then be used in cheaper cars for the masses.

A lot of automobile technology is developed in race cars like Formula 1 many years before making it's way into mainstream cars.

I can't comment on the government subsidies though.

of course not. it doesn't matter if government takes over venture funding. its not like they're bad at stuff