Subsidizing Low- and Middle-Income Adoption of Electric Vehicles: Quasi-Experimental Evidence from California

Erich Muehlegger and David Rapson

No 25359, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Little is known about electric vehicle (EV) demand by low- and middle-income households. In this paper, we exploit a policy that provides exogenous variation in large EV subsidies targeted at the mass market in California. Using transaction-level data, we estimate three important policy parameters: the rate of subsidy pass-through, the impact of the subsidy on EV adoption, and the elasticity of demand for EVs among low- and middle-income households. Demand for EVs in our sample is price-elastic (-3.3) and pass-through to buyers is indistinguishable from 100 percent. We use these estimates to calculate that the expected subsidy bill required for California to reach its goal of 1.5 million EVs by 2025 is likely to exceed $12-18 billion.

JEL-codes: H22 H23 H71 L62 Q48 Q55 Q58 R48 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-ene, nep-reg and nep-tre
Note: EEE PE
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Citations: View citations in EconPapers (10)

Published as Erich Muehlegger & David S. Rapson, 2022. "Subsidizing low- and middle-income adoption of electric vehicles: Quasi-experimental evidence from California," Journal of Public Economics, vol 216.

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Journal Article: Subsidizing low- and middle-income adoption of electric vehicles: Quasi-experimental evidence from California (2022)
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