Disparities and Equity Issues of Electric Vehicles Rebate Allocation

Abstract

The path towards light-duty vehicle electrification promises benefits like lower costs for drivers and reduced environmental externalities for all. Incentives such as electric vehicle rebates assist with alleviating high capital costs of alternative fuel cars. We uncover distributional effects of plug-in electric vehicle rebates, focusing on a program in the State of California. We leverage economic attributes representative of populations of census tracts as well as data on rebates distributed to plug-in electric vehicle buyers through the Clean Vehicle Rebate Project from 2010 to 2018. Horizontal and vertical equity measures are evaluated, while measurement of spatial association characterizes spatial patterns of rebates allocation across the State. We evaluate the distributional fairness of rebates allocation between income groups and disadvantaged communities. We find that rebates have been predominantly given to higher-income electric vehicle buyers. However, the share of rebates distributed to low-income groups and disadvantaged communities increased after an income-cap policy was put into effect. Spatial analysis shows high spatial clustering effects and rebates concentration in major metropolitan regions. We reveal neighborhood effects: communities with lower median income or disadvantaged receive higher rebate amount when these are close to spatial clusters characterized as high income and high rebate amount receivers.