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A Tale of Two Investments: Charging Stations and Purchase Subsidies for EV Adoption

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  • Liao, Yanjun (Penny)

    (Resources for the Future)

  • Luo, Bei
  • Spiller, Beia

    (Resources for the Future)

Abstract

This paper studies the interaction between financial purchase subsidies and charging infrastructure development in promoting electric vehicle (EV) adoption. Leveraging survey data from the Clean Vehicle Rebate Project (CVRP) in California and spatial information on charging stations, we find a significant positive impact of higher charging station density on self-reported importance of CVRP rebates in EV purchase decisions. The results exhibit substantial heterogeneity between lower- and higher-income individuals, likely due to their different charging needs. Our findings reveal a complementary relationship between improving charging prevalence and providing purchase subsidies, which suggests that a hybrid policy combining these two types of incentives might help optimize the overall cost-effectiveness in accelerating EV adoption.

Suggested Citation

  • Liao, Yanjun (Penny) & Luo, Bei & Spiller, Beia, 2024. "A Tale of Two Investments: Charging Stations and Purchase Subsidies for EV Adoption," RFF Working Paper Series 24-12, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-24-12
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    File URL: https://www.rff.org/documents/4560/WP_24-12.pdf
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    References listed on IDEAS

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    1. Shanjun Li & Lang Tong & Jianwei Xing & Yiyi Zhou, 2017. "The Market for Electric Vehicles: Indirect Network Effects and Policy Design," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(1), pages 89-133.
    2. Arie Beresteanu & Shanjun Li, 2011. "Gasoline Prices, Government Support, And The Demand For Hybrid Vehicles In The United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 161-182, February.
    3. Sheldon, Tamara L. & Dua, Rubal, 2019. "Measuring the cost-effectiveness of electric vehicle subsidies," Energy Economics, Elsevier, vol. 84(C).
    4. Muehlegger, Erich & Rapson, David, 2019. "Understanding the Distributional Impacts of Vehicle Policy: Who Buys New and Used Electric Vehicles?," Institute of Transportation Studies, Working Paper Series qt1q259456, Institute of Transportation Studies, UC Davis.
    5. Ledna, Catherine & Muratori, Matteo & Brooker, Aaron & Wood, Eric & Greene, David, 2022. "How to support EV adoption: Tradeoffs between charging infrastructure investments and vehicle subsidies in California," Energy Policy, Elsevier, vol. 165(C).
    6. Silvia, Chris & Krause, Rachel M., 2016. "Assessing the impact of policy interventions on the adoption of plug-in electric vehicles: An agent-based model," Energy Policy, Elsevier, vol. 96(C), pages 105-118.
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