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Willingness to pay and preferences for alternative incentives to EV purchase subsidies: An empirical study in China

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  • Ma, Shao-Chao
  • Xu, Jin-Hua
  • Fan, Ying

Abstract

The transport sector's promotion of electric vehicles (EVs) is an important tool in reducing greenhouse gas emissions. The high monetary subsidies widely used to promote EV diffusion in many countries are not sustainable in the long term. Therefore, effective alternative incentives are needed as subsidies are gradually phased out. In this paper, consumers' willingness to pay (WTP) for alternative incentives is studied based on a questionnaire survey. Using a discrete choice experiment, 1719 Chinese consumer questionnaires were collected. Consumers' WTP for nine alternative policies was calculated by applying the multinomial logit model and mixed logit model, and the mixed logit model is used as the main model of this study because of its better statistical performance. Finally, the relationship between the respondent heterogeneity and policy preferences was studied. The results show that alternative incentives can fill the gap produced by subsidy reductions. EV privileges like no restrictions on driving and purchases, which have the lowest implementation cost, are suitable for first- and second- tier cities. For second-tier cities, construction of more charging stations is the most appropriate choice. The heterogeneous features of the respondents, including cities of residence, type of vehicle owned, recognition of the environmental benefits of EVs, gender, and whether the family has children, had a significant impact on policy preferences.

Suggested Citation

  • Ma, Shao-Chao & Xu, Jin-Hua & Fan, Ying, 2019. "Willingness to pay and preferences for alternative incentives to EV purchase subsidies: An empirical study in China," Energy Economics, Elsevier, vol. 81(C), pages 197-215.
  • Handle: RePEc:eee:eneeco:v:81:y:2019:i:c:p:197-215
    DOI: 10.1016/j.eneco.2019.03.012
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    More about this item

    Keywords

    Willingness to pay; Electric vehicle; Alternative incentives; Discrete choice experiment; Policy design;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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