Abstract
The importance of electric car purchase incentives is starting to be questioned. The objective of this paper is to explore the potential effect of reducing or removing electric car purchase public subsidies in the European Union. To this end, the system dynamics Powertrain Technology Transition Market Agent Model is used. The size and timing of purchase incentives for this technology in European countries are investigated under eight scenarios and sensitivity analysis performed. The simulations suggest that, in the short-run, the electric car market share is higher when the subsidies remain in place. In the medium-run, a purchase subsidy scheme granting €3000 for plug-in hybrid electric cars and €4000 for battery electric cars over the period 2020–2024 yields the fastest electric car market uptake of all the scenarios considered. We conclude that, though the current evolution of the battery price is favorable, electric car purchase subsidies remain an effective policy measure to support electro-mobility in the next years.
Highlights
Over 3 million electric cars were circulating on the world’s roads by the end of 2017, of which ca. 22% were in the European Union (EU28) [1,2]
The latter is based on the assessment of the national policy frameworks (NPFs) notified to the European Commission and reported in [23]
Though powertrain technology transition market agent model (PTTMAM) is an exploratory rather than a predictive tool and the focus of this paper was on the EU, it was appropriate to gauge the validity of the model results at the country level
Summary
Over 3 million electric cars were circulating on the world’s roads by the end of 2017, of which ca. 22% were in the European Union (EU28) [1,2]. Financial incentives generally comprise registration and circulation tax reductions or exceptions as well as purchase subsidies for new electric cars. In the case of Denmark, the area reflects the government’s decision to remove the registration tax exemption for electric cars. Though no purchase subsidies were available to Danish and Dutch car buyers during this period, car registration and circulation taxes in these countries. Danish and Dutch car buyers during this period, car registration and circulation taxes in these are high, when compared to other EU Member States [11]. Given the experiences of the Danish and Dutch markets, the size and timing of incentives for technology in EU countries are investigated.
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