Differential license plate pricing and electric vehicle adoption in Shanghai

G. Li, W. Walls and X. Zheng

No 2022-01, Working Papers from Department of Economics, University of Calgary

Abstract: Electric vehicles are the most direct pathway to reduce greenhouse gas emissions of the transportation sector. Regulators around the world have announced ambitious targets on electric vehicle adoption. Direct financial subsidy is the dominant policy to encourage adoption. This paper investigates an alternative policy based on differential license plate pricing across vehicle types in Shanghai. We compare differential license plate pricing with purchase subsidy policy. With a revenue-neutral policy, differential license plate pricing is a more effective tool to promote electric vehicle adoption than direct purchase subsidies. Using monthly vehicle registration data from Shanghai, we estimate that electric vehicle sales would increase by 64% if the full cost of obtaining a license plate for a non-electric vehicle rises by 1,000 yuan ($150).

Keywords: Electric Vehicle; Differential License Pricing; Vehicle Control Policy (search for similar items in EconPapers)
JEL-codes: Q41 Q42 R4 R48 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:clg:wpaper:2022-01

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