The effect of fiscal incentives on market penetration of electric vehicles: A pairwise comparison of total cost of ownership

Petra Zsuzsa Lévay, Yannis Drossinos and Christian Thiel

Energy Policy, 2017, vol. 105, issue C, 524-533

Abstract: An important barrier to electric vehicle (EV) sales is their high purchase price compared to internal combustion engine (ICE) vehicles. We conducted total cost of ownership (TCO) calculations to study how costs and sales of EVs relate to each other and to examine the role of fiscal incentives in reducing TCO and increasing EV sales. We composed EV-ICE vehicle pairs that allowed cross-segment and cross-country comparison in eight European countries. Actual car prices were used to calculate the incentives for each model in each country. We found a negative TCO-sales relationship that differs across car segments. Compared to their ICE vehicle pair, big EVs have lower TCO, higher sales, and seem to be less price responsive than small EVs. Three country groups can be distinguished according to the level of fiscal incentives and their impact on TCO and EV sales. In Norway, incentives led to the lowest TCO for the EVs. In the Netherlands, France, and UK the TCO of EVs is close to the TCO of the ICE pairs. In the other countries the TCO of EVs exceeds that of the ICE vehicles. We found that exemptions from flat taxes favour big EVs, while lump-sum subsidies favour small EVs.

Keywords: Electric vehicle adoption; Fiscal incentives; Public policy; Total cost of ownership; Electric vehicle sales (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (100)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421517301404
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:105:y:2017:i:c:p:524-533

DOI: 10.1016/j.enpol.2017.02.054

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().