To get rid of gas powered cars altogether would be an ignorant move. If we could convert to Ethanol there would be no problem. It is a clean burning, renewable resource made from crop waste and it would give people jobs. Solar power is a dream, electric cars might be good, but Ethanol is the logical choice to get rid of big oil.
They are making a good choice if they ban the gas-powered cars. This technology is only designed make a few people rich. However, many people's jobs rely on these cars currently. So the ideal strategy is to have the workforce transition slowly to making the new cars. Unfortunately the economy is not that linear.
Free market forces are wonderful, in theory. In practice, businesses generally seek to maximize their profits. This means they don't look for the best way to build things, they look for the cheapest. If that means air, land or water pollutants are released, fine. That's what governments are for -- to legislate protections for the citizenry. Such as pollution controls. If the Netherlands bans gas-powered vehicles, that will force Big Business to seek other (hopefully less polluting) alternatives. Because the old tried-and-true gasoline engine is currently the cheapest to build and easiest to sell.
No, the country should not allow the free market forces to work in this case. Emissions from gas-powered cars can cause public health issues like smog. The government is being fair in giving citizens 10 years to replace their gas-powered cars so that it is not a huge financial strain or inconvenience.