The market doesn't care about external costs, you're right.
One thing to keep in mind though is that we may be nearing the time in which the market could handle this because renewables are getting very cheap. I'm not sure if we're at the point where if you dropped all oil subsidies that renewables would be cheaper (maybe not? I haven't done the math) but we should be getting close if we're not already there. At that point the market could, in theory, move to the one with the higher profit margins while still not caring about external costs.
One thing to keep in mind though is that we may be nearing the time in which the market could handle this because renewables are getting very cheap. I'm not sure if we're at the point where if you dropped all oil subsidies that renewables would be cheaper (maybe not? I haven't done the math) but we should be getting close if we're not already there. At that point the market could, in theory, move to the one with the higher profit margins while still not caring about external costs.