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What Does an Electric Vehicle Replace?

Author

Listed:
  • Jianwei Xing
  • Benjamin Leard
  • Shanjun Li

Abstract

The emissions reductions from the adoption of a new transportation technology depend on the emissions from the new technology relative to those from the displaced technology. We evaluate the emissions reductions from electric vehicles (EVs) by identifying which vehicles would have been purchased had EVs not been available. We do so by estimating a random coefficients discrete choice model of new vehicle demand and simulating counterfactual sales with EVs no longer subsidized or removed from the new vehicle market. Our results suggest that vehicles that EVs replace are relatively fuel-efficient: EVs replace gasoline vehicles with an average fuel economy of 4.2 mpg above the fleet-wide average and 12 percent of them replace hybrid vehicles. This implies that ignoring the non-random replacement of gasoline vehicles would result in overestimating emissions benefits of EVs by 39 percent. Federal income tax credits resulted in a 29 percent increase in EV sales, but 70 percent of the credits were obtained by households that would have bought an EV without the credits. By simulating alternative subsidy designs, we find that a subsidy designed to provide greater incentives to low-income households would have been more cost effective and less regressive.

Suggested Citation

  • Jianwei Xing & Benjamin Leard & Shanjun Li, 2019. "What Does an Electric Vehicle Replace?," NBER Working Papers 25771, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25771
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    References listed on IDEAS

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    Cited by:

    1. Erich Muehlegger & David S. Rapson, 2020. "Correcting Estimates of Electric Vehicle Emissions Abatement: Implications for Climate Policy," NBER Working Papers 27197, National Bureau of Economic Research, Inc.
    2. Becker, Jonathon M., 2021. "General equilibrium impacts on the U.S. economy of a disruption to Chinese cobalt supply," Resources Policy, Elsevier, vol. 71(C).
    3. Lucas W. Davis & James M. Sallee, 2020. "Should Electric Vehicle Drivers Pay a Mileage Tax?," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 1(1), pages 65-94.
    4. Meunier, Guy & Ponssard, Jean-Pierre, 2020. "Optimal policy and network effects for the deployment of zero emission vehicles," European Economic Review, Elsevier, vol. 126(C).
    5. Muehlegger, Erich J. PhD & Rapson, David S. PhD, 2020. "Estimating the Pollution Abatement Potential of Electric Vehicle Subsidies," Institute of Transportation Studies, Working Paper Series qt8dg237md, Institute of Transportation Studies, UC Davis.
    6. Daryabari, Mohamad K. & Keypour, Reza & Golmohamadi, Hessam, 2020. "Stochastic energy management of responsive plug-in electric vehicles characterizing parking lot aggregators," Applied Energy, Elsevier, vol. 279(C).
    7. Collischon, Matthias & Kühnle, Daniel & Oberfichtner, Michael, 2020. "Cash-for-care, or caring for cash? The effects of a home care subsidy on maternal employment, childcare choices, and children s development," IAB-Discussion Paper 202025, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Huwe, Vera & Gessner, Johannes, 2020. "Are there rebound effects from electric vehicle adoption? Evidence from German household data," ZEW Discussion Papers 20-048, ZEW - Leibniz Centre for European Economic Research.
    9. Kenneth Gillingham & Marten Ovaere & Stephanie Weber, 2021. "Carbon Policy and the Emissions Implications of Electric Vehicles," CESifo Working Paper Series 8974, CESifo.
    10. Soetevent, Adriaan R., 2021. "I’d Like to Move It! Consumption Rivalry in the EV Public Charging Market: Demand Estimation with Deterministic Choice Set Variation," EconStor Preprints 228520, ZBW - Leibniz Information Centre for Economics.
    11. Stephen P. Holland & Erin T. Mansur & Andrew J. Yates, 2020. "The Electric Vehicle Transition and the Economics of Banning Gasoline Vehicles," NBER Working Papers 26804, National Bureau of Economic Research, Inc.
    12. Li,Shanjun & Zhu,Xianglei & Ma,Yiding & Zhang,Fan & Zhou,Hui, 2020. "The Role of Government in the Market for Electric Vehicles : Evidence from China," Policy Research Working Paper Series 9359, The World Bank.

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    More about this item

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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