Analysis of alternative policy instruments to promote electric vehicles in Austria

Abstract

The large amount of CO2 emissions and of fossil fuel consumption caused by the transportation sector makes the sector central for attaining the EU energy and climate policy targets. Consequently, new propulsion systems are developed in the automotive industry, which currently have cost disadvantages compared to conventional internal combustion engines (ICE). The article provides a review on support measures for electric vehicles (EV), which have been currently implemented within the European Union. In a case study analysis for Austria, we analyze different policy instruments including a CO2 tax aiming to support the introduction of electric vehicles in Austria. We have calculated and compared total costs of ownership (TCO), which includes all costs associated with the ownership of an automobile including costs of purchasing, operating and maintaining, charges and taxes as well as costs of recycling and disposal. A survey on main specifications of electric vehicles has been conducted among the main automobile manufacturers and importers in Austria. Based on this survey, TCO have been calculated dynamically from 2011 to 2020 for a business as usual (BAU) scenario considering currently implemented taxes and subsidies for ICE and electric vehicle systems. Three alternative policy support measures have been assessed to promote EV until 2015. Results show that EV will be cost-competitive with ICE by the year 2012/2013 if projected production volumes and thus economies of scale are reached. Further, we conclude that an up-front price support seems to be favorable over taxation systems.