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The Norwegian support and subsidy of electric cars. Should it be adopted by other countries?

Anders Skonhoft () and Bjart Holtsmark ()

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: As a result of generous policies to increase the use of electric vehicles (EVs), the sales of EVs in Norway are rapidly increasing. This in sharp contrast to most other rich countries without such generous policies. Due to the subsidies, driving an EV implies very low costs to the owner on the margin, probably leading to more driving at the expense of public transport and cycling. Moreover, because most EVs’ driving range is low, the policy gives households incentives to purchase a second car, again stimulating the use of private cars instead of public transport and cycling. These effects are analysed in light of possible greenhouse gas (GHG) emission benefits as well as other possible benefits of utilizing EVs versus conventional cars. We discuss whether the EV policy can be justified, as well as whether this policy should be implemented by other countries.

Pages: 20 pages
Date: 2014-06-02
New Economics Papers: this item is included in nep-gro, nep-his and nep-ure
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