1932

Abstract

In this article, I review the academic literature on the economics of plug-in electric vehicles (PEVs), with a focus on PEV policy, benefits, and equity. PEVs are one of the most promising technologies for decarbonizing the transportation sector. As such, many government policies exist to promote their adoption. Understanding the effectiveness and equity of existing policies, what the realized environmental benefits are, and how these benefits compare to costs is crucial to improving future PEV policy. This review suggests that consumer PEV subsidies are not cost-effective and are often expensive relative to estimated environmental benefits. Furthermore, higher-income households who make up a larger share of the PEV market receive both a disproportionate amount of government subsidies as well as PEV benefits. There is considerable room for policy improvement.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-resource-111820-022834
2022-10-05
2024-07-15
Loading full text...

Full text loading...

/deliver/fulltext/resource/14/1/annurev-resource-111820-022834.html?itemId=/content/journals/10.1146/annurev-resource-111820-022834&mimeType=html&fmt=ahah

Literature Cited

  1. Archsmith J, Kendall A, Rapson D 2015. From cradle to junkyard: assessing the life cycle greenhouse gas benefits of electric vehicles. Res. Transp. Econ. 52:72–90
    [Google Scholar]
  2. Asensio O, Alvarez K, Dror A, Wenzel E, Hollauer C, Ha S. 2020. Real-time data from mobile platforms to evaluate sustainable transportation infrastructure. Nat. Sustain. 3:6463–71
    [Google Scholar]
  3. Axsen J, Kurani KS. 2009. Early US market for plug-in hybrid electric vehicles: anticipating consumer recharge potential and design priorities. Transp. Res. Rec. 2139:164–72
    [Google Scholar]
  4. Axsen J, Kurani KS. 2013. Hybrid, plug-in hybrid, or electric—What do car buyers want?. Energy Policy 61:532–43
    [Google Scholar]
  5. Bauer G, Hsu C, Lutsey N. 2021. When might lower-income drivers benefit from electric vehicles? Quantifying the economic equity implications of electric vehicle adoption Work. Pap. 2021-06 Int. Counc. Clean Transp. Berlin: https://theicct.org/sites/default/files/publications/EV-equity-feb2021.pdf
    [Google Scholar]
  6. Brownstone D, Bunch DS, Train K. 2000. Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles. Transp. Res. B Methodol. 34:5315–38
    [Google Scholar]
  7. Brownstone D, Train K. 1998. Forecasting new product penetration with flexible substitution patterns. J. Econom. 89:1–2109–29
    [Google Scholar]
  8. Bunch DS, Bradley M, Golob TF, Kitamura R, Occhiuzzo GP 1993. Demand for clean-fuel vehicles in California: a discrete-choice stated preference pilot project. Transp. Res. A Policy Pract. 27:3237–53
    [Google Scholar]
  9. Burlig F, Bushnell J, Rapson D, Wolfram C 2021. Low energy: estimating electric vehicle electricity use. AEA Pap. Proc. 111:30–35
    [Google Scholar]
  10. Bushnell J, Muehlegger E, Rapson D. 2021. Do electricity prices affect electric vehicle adoption? Res. Rep., Inst. Transp. Stud., Univ. Calif., Berkeley https://escholarship.org/uc/item/7p19k8c6
    [Google Scholar]
  11. Canepa K, Hardman S, Tal G. 2019. An early look at plug-in electric vehicle adoption in disadvantaged communities in California. Transp. Policy 78:19–30
    [Google Scholar]
  12. CARB (Calif. Air Resour. Board) 2017. California's advanced clean cars midterm review. Appendix G: plug-in electric vehicle in-use and charging data analysis 29 Rep., Calif. Environ. Prot. Agency, Air Resour. Board Sacramento, CA: https://ww2.arb.ca.gov/sites/default/files/2020-01/appendix_g_pev_in_use_and_charging_data_analysis_ac.pdf
    [Google Scholar]
  13. Chakraborty D, Buch K, Tal G. 2021a. Cost of vehicle ownership: cost parity between plug-in electric vehicles and conventional vehicles is at least a decade away Policy Brief UC Davis Inst. Transp. Stud., Natl. Cent. Sustain. Transp. Davis, CA: https://escholarship.org/uc/item/8wz0c90f
    [Google Scholar]
  14. Chakraborty D, Hardman S, Tal G. 2021b. Integrating plug-in electric vehicles (PEVs) into household fleets—factors influencing miles traveled by PEV owners in California Res. Rep. UC Davis Inst. Transp. Stud., Plug-In Hybrid Electr. Veh. Cent. Davis, CA: https://escholarship.org/uc/item/2214q937
    [Google Scholar]
  15. Congr. Res. Serv 2019. The plug-in electric vehicle tax credit Rep., Congr. Res. Serv. Washington, DC: updated May 14. https://sgp.fas.org/crs/misc/IF11017.pdf
    [Google Scholar]
  16. Davis L. 2019. Evidence of a homeowner-renter gap for electric vehicles. Appl. Econ. Lett. 26:11927–32
    [Google Scholar]
  17. Davis L. 2021. Electric vehicles in multi-vehicle households Work. Pap. 322R Energy Inst. Haas, Univ. Calif. Berkeley: https://www.haas.berkeley.edu/wp-content/uploads/WP322.pdf
    [Google Scholar]
  18. Davis LW, Sallee JM. 2020. Should electric vehicle drivers pay a mileage tax? NBER Work. Pap. w26072
    [Google Scholar]
  19. DeShazo J, Sheldon TL, Carson RT 2017. Designing policy incentives for cleaner technologies: lessons from California's plug-in electric vehicle rebate program. J. Environ. Econ. Manag. 84:18–43
    [Google Scholar]
  20. Dong J, Liu C, Lin Z. 2014. Charging infrastructure planning for promoting battery electric vehicles: an activity-based approach using multiday travel data. Transp. Res. C Emerg. Technol. 38:44–55
    [Google Scholar]
  21. Dunckley J, Tal G. 2016. Plug-in electric vehicle multi-state market and charging survey Tech. Update 3002007495 Electr. Power Res. Inst. Palo Alto, CA:
    [Google Scholar]
  22. Egbue O, Long S. 2012. Barriers to widespread adoption of electric vehicles: an analysis of consumer attitudes and perceptions. Energy Policy 48:717–29
    [Google Scholar]
  23. Funke S, Sprei F, Gnann T, Plötz P. 2019. How much charging infrastructure do electric vehicles need? A review of the evidence and international comparison. Transp. Res. D Transp. Environ. 77:224–42
    [Google Scholar]
  24. Gallagher KS, Muehlegger E. 2011. Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology. J. Environ. Econ. Manag 61:11–15
    [Google Scholar]
  25. Gillingham K, Ovaere M, Weber SM 2021. Carbon policy and the emissions implications of electric vehicles NBER Work. Pap. w28620
    [Google Scholar]
  26. Gillingham K, Stock JH. 2018. The cost of reducing greenhouse gas emissions. J. Econ. Perspect. 32:453–72
    [Google Scholar]
  27. Graff Zivin J, Kotchen MJ, Mansur ET. 2014. Spatial and temporal heterogeneity of marginal emissions: implications for electric cars and other electricity-shifting policies. J. Econ. Behav. Organ. 107:248–68
    [Google Scholar]
  28. Guo S, Kontou E. 2021. Disparities and equity issues in electric vehicles rebate allocation. Energy Policy 154:112291
    [Google Scholar]
  29. Guo Z, Zhou Y. 2019. Residual value analysis of plug-in vehicles in the United States. Energy Policy 125:445–55
    [Google Scholar]
  30. Hardman S. 2019. Understanding the impact of reoccurring and non-financial incentives on plug-in electric vehicle adoption—a review. Transp. Res. A Policy Pract. 119:1–14
    [Google Scholar]
  31. Hardman S, Chandan A, Tal G, Turrentine T. 2017. The effectiveness of financial purchase incentives for battery electric vehicles—a review of the evidence. Renew. Sustain. Energy Rev. 80:1100–11
    [Google Scholar]
  32. Hardman S, Jenn A, Tal G, Axsen J, Beard G et al. 2018. A review of consumer preferences of and interactions with electric vehicle charging infrastructure. Transp. Res. D Transp. Environ. 62:508–23
    [Google Scholar]
  33. Hartman K, Shields L. 2021. Special fees on plug-in hybrid and electric vehicles. National Conference of State Legislatures Oct. 12. https://www.ncsl.org/research/energy/new-fees-on-hybrid-and-electric-vehicles.aspx
    [Google Scholar]
  34. Hidrue MK, Parsons GR, Kempton W, Gardner MP 2011. Willingness to pay for electric vehicles and their attributes. Resour. Energy Econ. 33:3686–705
    [Google Scholar]
  35. Holland SP, Mansur ET, Muller NZ, Yates AJ. 2016. Are there environmental benefits from driving electric vehicles? The importance of local factors. Am. Econ. Rev. 106:123700–29
    [Google Scholar]
  36. Holland SP, Mansur ET, Muller NZ, Yates AJ. 2019. Distributional effects of air pollution from electric vehicle adoption. J. Assoc. Environ. Resour. Econ. 6:S1S65–94
    [Google Scholar]
  37. Hsu CW, Fingerman K. 2021. Public electric vehicle charger access disparities across race and income in California. Transp. Policy 100:59–67
    [Google Scholar]
  38. Jenn A, Azevedo IML, Michalek JJ. 2016. Alternative fuel vehicle adoption increases fleet gasoline consumption and greenhouse gas emissions under United States corporate average fuel economy policy and greenhouse gas emissions standards. Environ. Sci. Technol. 50:52165–74
    [Google Scholar]
  39. Jenn A, Lee JH, Hardman S, Tal G. 2020. An in-depth examination of electric vehicle incentives: consumer heterogeneity and changing response over time. Transp. Res. A Policy Pract. 132:97–109
    [Google Scholar]
  40. Jenn A, Springel K, Gopal AR 2018. Effectiveness of electric vehicle incentives in the United States. Energy Policy 119:349–56
    [Google Scholar]
  41. Jia W, Chen TD. 2021. Are individuals’ stated preferences for electric vehicles (EVs) consistent with real-world EV ownership patterns?. Transp. Res. D Transp. Environ. 93:102728
    [Google Scholar]
  42. Jin L, Searle S, Lutsey N 2014. Evaluation of state-level U.S. electric vehicle incentives White Pap., Int. Counc. Clean Transp. Berlin: https://www.a3ps.at/site/sites/default/files/newsletter/2014/no21/ICCT.pdf
    [Google Scholar]
  43. Krause RM, Carley SR, Lane BW, Graham JD 2013. Perception and reality: public knowledge of plug-in electric vehicles in 21 US cities. Energy Policy 63:433–40
    [Google Scholar]
  44. Lee JH, Hardman SJ, Tal G. 2019. Who is buying electric vehicles in California? Characterising early adopter heterogeneity and forecasting market diffusion. Energy Res. Soc. Sci. 55:218–26
    [Google Scholar]
  45. Li S, Tong L, Xing J, Zhou Y 2017. The market for electric vehicles: indirect network effects and policy design. J. Assoc. Environ. Resour. Econ. 4:189–133
    [Google Scholar]
  46. Muehlegger E, Rapson D. 2019. Understanding the distributional impacts of vehicle policy: Who buys new and used electric vehicles? Policy Brief, UC Davis Inst. Transp. Stud., Natl. Cent. Sustain. Transp. Davis, CA: https://escholarship.org/uc/item/1q259456
    [Google Scholar]
  47. Narassimhan E, Johnson C 2018. The role of demand-side incentives and charging infrastructure on plug-in electric vehicle adoption: analysis of US states. Environ. Res. Lett. 13:7074032
    [Google Scholar]
  48. Nicholas MA, Tal G. 2013. Charging for charging at work: increasing the availability of charging through pricing Work. Pap. UCD-ITS-WP-13-02 UC Davis Inst. Transp. Stud. Davis, CA:
    [Google Scholar]
  49. Osaka S. 2021. The EV tax credit can save you thousands—if you're rich enough. Grist Feb. 26. https://grist.org/energy/the-ev-tax-credit-can-save-you-thousands-if-youre-rich-enough/
    [Google Scholar]
  50. Penn I, Chokshi N 2021. Electric cars for everyone? Not unless they get cheaper. New York Times Aug. 9. https://www.nytimes.com/2021/08/09/business/energy-environment/biden-electric-cars-cost.html
    [Google Scholar]
  51. Rajagopal D, Phadke A. 2019. Prioritizing electric miles over electric vehicles will deliver greater benefits at lower cost. Environ. Res. Lett. 14:091001
    [Google Scholar]
  52. Sheldon TL, DeShazo JR. 2017. How does the presence of HOV lanes affect plug-in electric vehicle adoption in California? A generalized propensity score approach. J. Environ. Econ. Manag. 85:146–70
    [Google Scholar]
  53. Sheldon TL, DeShazo JR, Carson RT. 2017. Electric and plug-in hybrid vehicle demand: lessons for an emerging market. Econ. Inq. 55:2695–713
    [Google Scholar]
  54. Sheldon TL, DeShazo JR, Carson RT. 2019. Demand for green refueling infrastructure. Environ. Resour. Econ. 74:1131–57
    [Google Scholar]
  55. Sheldon TL, DeShazo JR, Pierce G. 2020. Assessing effectiveness of financing subsidies on clean vehicle adoption by low- and moderate-income consumers Work. Pap., Univ. S.C. Columbia: https://tamaralynnsheldon.wixsite.com/home
    [Google Scholar]
  56. Sheldon TL, Dua R. 2018. Gasoline savings from clean vehicle adoption. Energy Policy 120:418–24
    [Google Scholar]
  57. Sheldon TL, Dua R. 2019a. Assessing the effectiveness of California's “Replace Your Ride. .” Energy Policy 132:318–23
    [Google Scholar]
  58. Sheldon TL, Dua R. 2019b. Measuring the cost-effectiveness of electric vehicle subsidies. Energy Econom. 84:104545
    [Google Scholar]
  59. Sierzchula W, Bakker S, Maat K, Van Wee B. 2014. The influence of financial incentives and other socio-economic factors on electric vehicle adoption. Energy Policy 68:183–94
    [Google Scholar]
  60. Sivak M, Schoettle B. 2018. Relative costs of driving electric and gasoline vehicles in the individual US states Rep. SWT-2018-1 Univ. Mich. Ann Arbor:
    [Google Scholar]
  61. Smart JG, Salisbury SD. 2015. Plugged in: how Americans charge their electric vehicles Rep. INL/EXT-15-35584 Ida. Natl. Lab. Idaho Falls, Ida: https://www.osti.gov/biblio/1369632
    [Google Scholar]
  62. Squatriglia C. 2010. Nissan Leaf electric vehicle is surprisingly affordable. Wired March 30. https://www.wired.com/2010/03/nissan-leaf-ev-price/
    [Google Scholar]
  63. Tal G, Nicholas M. 2016. Exploring the impact of the federal tax credit on the plug-in vehicle market. Transp. Res. Rec. 2572:195–102
    [Google Scholar]
  64. Transp. Res. Board/Natl. Res. Counc 2015. Overcoming Barriers to Deployment of Plug-in Electric Vehicles Washington, DC: Natl. Acad. Press
    [Google Scholar]
  65. US Dep. Energy 2014. The history of the electric car. Energy.gov Sept. 15. https://www.energy.gov/articles/history-electric-car
    [Google Scholar]
  66. US Dep. Transp. Fed. Highw. Admin 2017a. National household travel survey http://nhts.ornl.gov
    [Google Scholar]
  67. US Dep. Transp. Fed. Highw. Admin 2017b. Summary of travel trends: 2017 National Household Travel Survey Rep. Form DOT F 1700.7 (8-72) US Dep Transport. Fed. Highw. Admin. Washington, DC: https://nhts.ornl.gov/assets/2017_nhts_summary_travel_trends.pdf
    [Google Scholar]
  68. Winn R. 2016. Electric vehicle charging at work: understanding workplace PEV charging behavior to inform pricing policy and investment decisions Rep., Luskin Sch. Public Aff., Univ. Calif. Los Angeles: https://innovation.luskin.ucla.edu/wp-content/uploads/2019/03/EV_Charging_at_Work.pdf
    [Google Scholar]
  69. Xing J, Leard B, Li S 2021. What does an electric vehicle replace?. J. Environ. Econ. Manag. 107:102432
    [Google Scholar]
/content/journals/10.1146/annurev-resource-111820-022834
Loading
/content/journals/10.1146/annurev-resource-111820-022834
Loading

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error