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The role of financial incentives in promoting electric light commercial vehicles in the United States

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  • Guo, Yan
  • Fraser, Timothy
  • Silveira, Semida

Abstract

The growing demand for e-commerce globally has accentuated the role of light commercial vehicles (LCVs) in ensuring urban logistics. Meanwhile, transport electrification is being promoted widely in the US as a low carbon solution. However, the low adoption rates of electric vehicles (around 1%) are a cause of concern. This paper investigates the LCV market in seven American states, focusing on the impact of financial incentives on the Total Cost of Ownership (TCO) for eLCVs in comparison to their gasoline equivalents. The study finds that electric light commercial vehicles (eLCVs) generally have a lower TCO than their gasoline counterparts, even without state-level financial incentives. Thus, while financial incentives lower the initial cost of eLCVs, the cost barrier cannot justify the low rate of eLCV adoption. The study highlights the present economic viability of eLCVs for businesses and provides empirical evidence to justify a review of policy measures aimed at promoting transport electrification.

Suggested Citation

  • Guo, Yan & Fraser, Timothy & Silveira, Semida, 2025. "The role of financial incentives in promoting electric light commercial vehicles in the United States," Energy Policy, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:enepol:v:199:y:2025:i:c:s0301421525000333
    DOI: 10.1016/j.enpol.2025.114526
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