 Free-ridership in subsidies for company- and private electric vehiclesLavan T. Burra, Stephan Sommer and Colin Vance Energy Economics, 2024, vol. 131, issue C Abstract: Consumer subsidies are commonly employed to incentivize the purchase of battery electric vehicles (BEVs), but free-ridership potentially undermines their effectiveness. The present study investigates BEV subsidies in Germany, distinguishing their effect between company- and private cars. Drawing on a panel of high-resolution car registration data, we use the estimates from a Poisson pseudo-maximum likelihood model to predict BEV registrations in the absence of the subsidy. We calculate aggregate free-rider rates of 56.5% for private cars and 87.1% for company cars. We further find that the cost of the subsidy per induced BEV among private consumers is €9,718, while it is €30,780 among companies. Overall, the estimates suggest that the subsidy is considerably less cost effective among company cars, which comprise 55% of new BEV sales. An auxiliary analysis that recognizes the possibility of differential pass-through rates of the subsidy over time confirms this conclusion. Keywords: Electric vehicles; Consumer subsidy; Company cars; Free ridership; Pass-through (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:131:y:2024:i:c:s0140988324000410 DOI: 10.1016/j.eneco.2024.107333 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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