New study: government EV incentives effective…in most cases

How effective are government incentives at encouraging EV adoption? Very, according to a white paper from the International Council on Clean Transportation (ICCT), but they don’t tell the whole story.

The new report, written by Peter Mock and Zifei Yang, details the differences in pro-plug-in fiscal policies across eleven major auto markets. It quantifies taxation differences between plug-ins and legacy gas-burners, incorporates fuel and electricity prices to evaluate the equivalent total cost of ownership, and links the levels of incentives to the levels of EV market share and sales growth.


It’s no surprise that plug-ins are moving much faster in some markets than in others. Norway has the highest market share – 6% of all passenger cars sold there in 2013 were plug-ins. The Netherlands has the second-highest share (5.6%), followed by California (4%). Overall market share for the US was 1.3%.

It’s also unsurprising that the top plug-in markets are ones where governments offer generous subsidies. Norway’s fiscal incentive works out to about 55% of a vehicle’s base price, and Holland’s to about 75%. In Germany, where incentives are meager, plug-ins took only 0.2% of the market.


However, there are a number of outliers, indicating that government incentives do not always achieve the desired result, and that other unknown factors are in play. “The research findings indicate that fiscal incentives matter, but are clearly not the only factor that influences today’s electric vehicle market growth,” wrote Mock and Yang. For example, despite a relatively high level of fiscal incentives, the current market share of EVs in the UK was found to be low (0.2%). Many confounding factors mean that a clear direct relationship remains elusive between national fiscal incentives and electric vehicles’ early market growth.”

The researchers conclude that more study is needed (Don’t they always?). A more comprehensive survey should investigate “the importance of vehicle manufacturer policy (emission standards, electric vehicle requirements), infrastructure (residential equipment, public charging), electric utility actions (time of use charging), and other local policy (reduced rates for toll roads, preferential parking).”


Source: International Council on Clean Transportation via Green Car Congress

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