Incentivizing Adoption of Plug-in Electric Vehicles: A Review of Global Policies and Markets

Abstract

This report summarizes current government policies that seek to increase deployment of light-duty, plug-in electric vehicles (PEVs) in the United States, Europe, and China. The paper also describes recent PEV market trends in these three regions. By comparing combinations of PEV policies and trends of PEV sales in different regions at national and subnational levels, the authors make several observations and draw general conclusions, using supporting examples for the findings. One finding, consistent with earlier studies, is that multiple, complementary PEV incentives and deployment policies are generally more effective in increasing adoption of PEVs within a given market than single policie s. In most regions, financial incentives, especially point -of -sale incentives, are effective in increasing adoption, particularly when generous and combined with other supporting polices, such as increasing charging station availability, which contributes to ease of use. The authors also observed differences in policies and market trends between regions. In Europe, where taxes on vehicles are high, tax credits provide strong incentives for PEV adoption, whereas in several Chinese cities, where restrictions on vehicle registration or use are imposed, relaxation of restrictions on PEVs effectively promote PEV adoption. In addition, governments are replacing some policies based on technical specifications (e.g., battery capacity) with policies based on performance metrics (e.g., vehicle range and electricity consumption rate per distance).