Document Type
Article
Abstract
Promoting plug-in electric vehicle (PEV) adoption through subsidies represents a commonly used policy lever for decarbonizing the light-duty vehicle sector. However, it is unclear how the subsidy cost-effectiveness has evolved over time and whether further subsidization is needed to induce adoption beyond wealthy consumers. We explore these questions by assessing the federal PEV subsidy program in the United States. To do so, we extend Sheldon and Dua's (2019a, 2019b) work by using the same approach on large-scale U.S. new vehicle buyer survey data. While results averaged over fuel-types suggest that PEV subsidies are becoming less impactful and costlier over time, detailed model-level exploration reveals that it is due to an increasing share of higher-priced BEVs such as Teslas. The model-level subsidy impact has not changed much over time. Moreover, if the subsidies had been discontinued in 2017, half of the below median income (90 K USD) new vehicle buyers would not have adopted a PEV, highlighting the need to continue the subsidies. The findings hold significance for policymakers worldwide on how to design effective PEV subsidy programs.
Digital Object Identifier (DOI)
Publication Info
Published in Energy Economics, Volume 120, 2023.
APA Citation
Sheldon, T. L., Dua, R., & Alharbi, O. A. (2023). Electric vehicle subsidies: Time to accelerate or pump the brakes? Energy Economics, 120, 106641. https://doi.org/10.1016/j.eneco.2023.106641
Rights
© 2023 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/bync-nd/4.0/).