Subsidies For Electric Vehicles Research Articles

Fit for 2030? Possible scenarios of road transport demand, energy consumption and greenhouse gas emissions for Italy

Decarbonizing the transportation sector is one of the key challenges to reduce greenhouse gas (GHG) emissions and meet EU Green Deal 2030 targets. Road transport decarbonization requires a holistic approach encompassing various strategies and interventions aimed at fostering the sustainable transition of this sector. This challenge is crucial given that road is responsible for over 90% of the overall transport GHG emissions.Within this framework, this study aims, for the Italian case, to: a) estimate the national passenger and freight road travel demand with respect to three different time periods: 2005 (reference year for EU “fit for 55” target); 2019 (last consolidated pre-covid year); 2022 (base-line year); b) define possible road transport scenarios to 2030 following the Avoid-Shift-Improve (ASI) approach; c) estimate the GHG and energy consumption inventory related to national road transport for the 2005, 2019; 2022 and 2030 scenarios. Due to the current “deep uncertainty” regarding key economic and social variables in this period, two forecasting scenarios – named “moderate decarbo” and “high decarbo” – were designed and based on different and somewhat opposite hypotheses on exogenous variables (e.g., GDP) and penetration rates of measures and policies promoting sustainable transportation (e.g., subsidies for electric vehicles) already in place. Although the current European legislation refers only to Tank-to-Wheel (TtW) objectives, this study included also the Well-to-Wheel (WtW) evaluation, which is more accurate in assessing the GHG impact of different policies, energy carriers, and technologies. As for the past, results suggest that GHG reductions over the period 2005-2022 are mostly due to crises and stagnation of the Italian economy. “Moderate decarbo” forecasts for 2030 lead to a 12% reduction of TtW (and 15% for WtW) GHG emissions compared to 2005 levels, with ASI policies compensating for the assumed economic growth. In any case these values are far from the EU “Fit for 55” goal setting a 43.7% reduction of TtW emissions. Even under very favourable hypotheses (“high decarbo” scenario), GHG emissions might be reduced by only 28% for TtW and 33% for WtW, still well below EU objectives. Furthermore, passengers and freight show very different behaviour, with the latter contributing to emissions more than proportionally, and “shift-to-rail” policies, although very useful in some market segments, contribute moderately at the overall national level. The main conclusion of this study is that the pathway towards road transport decarbonization in Italy (and possibly in other EU Countries) is very uncertain, and the ambitious 2030 target is unlikely to be met with currently planned policies alone. The transportation system needs to be constantly monitored, and new policies have to be implemented to reach higher emissions reduction goals.

Comparison of SVM & Naïve Bayes Methods in Sentiment Analysis of Electric Vehicle Subsidy Policy Based on X Data

The policy of subsidizing electric vehicles has become a widely discussed issue on social media platform X. The provision of electric vehicle subsidies by the Indonesian government aims to stimulate higher adoption of electric vehicles, with the overarching goal of mitigating air pollution. However, the presence of electric vehicle subsidies continues to elicit both support and opposition among the public. On social media platform X, there is a wealth of data suitable for text mining, particularly concerning the current hot topic of electric vehicle subsidies. This research aims to compare the performance of Support Vector Machine (SVM) and Naïve Bayes methods in conducting sentiment analysis on discussions related to the electric vehicle subsidy policy on social media platform X. The testing technique involves using 20% of the total dataset, comprising 5553 data points, and employing 10-fold cross-validation. The results from the 20% test data indicate that the Support Vector Machine (SVM) method's confusion matrix performance is superior, with the highest values achieved using the RBF kernel: accuracy 83.02%, precision 84.61%, and recall 83.02%. In the performance evaluation testing with 10-fold cross-validation, the Support Vector Machine (SVM) method outperforms, especially with the RBF kernel, yielding an average accuracy of 82.88% over 10 iterations.

The Politics of Electric Vehicle Subsidies in Indonesia: Actors, Agenda, and Issues

In light of the worldwide determination to address the consequences of climate change, the Indonesian government has established a goal of achieving carbon neutrality by the year 2060. The transportation sector in Indonesia is a significant source of carbon emissions due to its extensive reliance on fossil fuel consumption. In response to this challenge, the Indonesian government has implemented measures to expedite the motor vehicle electrification program by introducing a subsidy policy aimed at facilitating the public’s acquisition of electric vehicles. The formulation of this strategy initiated a sequence of discussions within the public domain. In order to gain a comprehensive understanding of the many actors involved and the process of discourse formation within the discussion, this study has undertaken the collection of 198 stakeholder statements as presented in articles published by national mass media outlets throughout the period spanning from January 2023 to June 2023. This statement mapped with the Discourse Coalition Framework (DCF) theory to find the network of discourse and ideas as the data that was subsequently subjected to analysis utilizing the Discourse Network Analysis. The findings of this study indicate that the discourse surrounding the subsidy program for electric vehicles gave rise to actor network groups that advocated investment and concerns related to environmental sustainability. The author examines the limitations to the interconnections between theoretical frameworks empirical evidence in shaping the discourse surrounding the dynamics of network politics in relation to electric vehicle subsidies in Indonesia.

Ocena wpływu ustawy o ograniczaniu inflacji Stanów Zjednoczonych z 2022 r. na międzynarodowych producentów samochodów na przykładzie Volkswagena

The Inflation Reduction Act, passed by the U.S. Congress in 2022, is a major climate change investment plan that allocates nearly half a trillion dollars for climate initiatives and health care. A key aspect of the Inflation Reduction Act is subsidizing electric vehicles based on certain criteria that call for national production in particular. Only nine automakers, including one international one, namely Volkswagen, made it onto the list of carmakers approved for the subsidy. The exclusion of foreign manufacturers caused controversy. Volkswagen’s inclusion gave it a massive competitive advantage. This case study examines the impact of the Inflation Reduction Act on international business related to the automotive industry, specifically Volkswagen, using a SWOT analysis. The eligibility criteria for electric vehicle subsidies are analyzed, showing the focus on U.S. production and components. The SWOT analysis examines Volkswagen’s strengths, weaknesses, opportunities, and threats considering the IRA.

Effectiveness of electric vehicle subsidies in China: A three-dimensional panel study

Electric vehicles (EVs) are likely to emerge as the main means of zero-emission road transport. China has used a variety of policy approaches to encourage EV adoption, including vehicle purchase subsidies. This study uses a three-dimensional dataset to estimate the effect of purchase subsidies for domestic EVs on adoption in 316 cities in China over January 2016–December 2019. An instrumental variable approach that utilizes the timing of the cancellation of local subsidies by the central government is pursued. The findings suggest that purchase subsidies for domestic EVs have led to a sizeable increase in uptake, but have discouraged uptake of imported EVs. Higher consumer awareness of the subsidies is associated with a larger proportional effect on uptake of domestically-produced vehicles. We estimate that increases in the per-vehicle subsidy rate have on average reduced carbon dioxide (CO2) emissions at a marginal subsidy cost of about 4,453 CNY (US$712) per tonne, which is high. However other benefits, including long-run benefits from the emergence of a new clean technology sector, may be substantial.

Electric vehicle subsidy structure considering network externality under carbon neutrality constraints

PurposePromoting electric vehicles (EVs) is an effective way to achieve carbon neutrality. If EVs are widely adopted, this will undoubtedly be good for the environment. The purpose of this study is to analyze the impact of network externalities and subsidy on the strategies of manufacturer under a carbon neutrality constraint.Design/methodology/approachIn this paper, the authors propose a game-theoretic framework in an EVs supply chain consisting of a government, a manufacturer and a group of consumers. The authors examine two subsidy options and explain the choice of optimal strategies for government and manufacturer.FindingsFirst, the authors find that the both network externalities of charging stations and government subsidy can promote the EV market. Second, under a relaxed carbon neutrality constraint, even if the government’s purchase subsidy investment is larger than the carbon emission reduction technology subsidy investment, the purchase subsidy policy is still optimal. Third, under a strict carbon neutrality constraint, when the cost coefficient of carbon emission reduction and the effectiveness of carbon emission reduction technology are larger, social welfare will instead decrease with the increase of the effectiveness of emission reduction technology and then, the manufacturer’s investment in carbon emission reduction technology is lower. In the extended model, the authors find the effectiveness of carbon emission reduction technology can also promote the EV market and social welfare (or consumer surplus) is the same whatever the subsidy strategy.Practical implicationsThe network externalities of charging stations and the subsidy effect of the government have a superimposition effect on the promotion of EVs. When the network effect of charging stations is relatively strong, government can withdraw from the subsidized market. When the network effect of charging stations is relatively weak, government can intervene appropriately.Originality/valueComparing previous studies, this study reveals the impact of government intervention, network effects and carbon neutrality constraints on the EV supply chain. From a sustainability perspective, these insights are compelling for both EV manufacturers and policymakers.

How the United States solved South Korea’s problems with electric vehicle subsidies under the Inflation Reduction Act

South Korea felt ‘betrayed’ when President Biden signed his administration’s flagship climate legislation, the Inflation Reduction Act (IRA) of 2022, into law. This article first shows how the Biden administration addressed Korea’s concerns about the law’s effect on its sales of electric vehicles (EVs) in the United States. Thanks in part to the Treasury Department’s regulations written to implement the law, Korean exports of EVs to the United States grew even after the IRA went into force. Whether these actions by the Biden administration are enough to assuage the concerns of the Koreans – and other allies adversely affected by the IRA – remains to be seen. Furthermore, the US accommodation of Korean concerns came with tradeoffs by offsetting key incentives Congress may have intended in passing the IRA. The article also examines potential impacts of the law on South Korean battery companies, and it provides an initial exploration into how the Korean government responded to IRA by adjusting its own policy mix of EV consumer tax credits and industrial policy for its EV plants and battery makers. Electric vehicles, batteries, industrial policy, supply chains, climate, US, South Korea

China fights back at EU probe into electric vehicle subsidies

China fights back at EU probe into electric vehicle subsidies

A game-theoretic model to compare charging infrastructure subsidy and electric vehicle subsidy policies

A game-theoretic model to compare charging infrastructure subsidy and electric vehicle subsidy policies

The Influence of Consumption Subsidy Policy on Chinas Domestic Electric Vehicle Market -- Take BYD as Example

Chinas consumption subsidy policy is considered as a dominant factor in promoting the development of the domestic electric vehicle (EV) market, and companies like BYD have benefited from this policy. BYD, one of the leading EV manufacturers in China, has seen significant growth in EV sales since introducing the subsidy policy. This paper examines the influence that Chinas EV subsidy policy brings to BYD, highlighting the pros and cons of the policy and the challenges and opportunities faced by EV manufacturers in China. Specifically, the policy has helped to make EVs more affordable and accessible to consumers, but it has also led to overcapacity and intense competition among manufacturers. The policy has also been criticized for being too heavily focused on subsidies and insufficient on other measures, such as infrastructure development, necessary for the EV markets growth. By examining the subsidy policies and market performance of BYD, this paper highlights the effectiveness as well as drawbacks of the subsidy policy and the challenges and opportunities faced by EV manufacturers in China.

Assessing the nexus of electric vehicle and energy policies on health risks

The intricate interactions between electric vehicles and energy policies necessitate a methodology that integrates technological, economic and environmental assessments. Given the spatial and temporal manifestations of nexus effects, the coordination between the central and local governments and the timing of policy implementation has to be considered to maximize synergy and minimize the tradeoffs between both policies. This study combined an econometric model that incorporates a technological prediction model with an atmospheric model. The aim is to explore the nexus effects of electric vehicle and energy policies and assess the resultant health risks attributed to PM2.5 emissions. The findings from this study demonstrated that different locations benefit or suffer differently concerning changes in health risks after the government banned fuel-powered vehicles and provided subsidies for electric vehicles. The modeling outputs highlight the effects of time lags, spatial transfers, and net reductions in mortality on risk shifts resulting from the policy nexus. The key factors contributing to spatial and temporal variations in risks include technological evolution, facility lifespans and locations, and population density.

Twitter Sentiment Analysis of Electric Vehicle Subsidy Policy using Naïve Bayes Algorithm

This research aims to apply the Naïve Bayes classifier in Indonesian-language sentiment analysis, regarding electric vehicle subsidy policies using Twitter data with the query 'subsidi kendaraan listrik'. The stages of analysis include data pre-processing, tokenization, stemming, forming the Naïve Bayes model, and evaluating model performance using accuracy, precision, and recall. The SMOTE technique is used to deal with class imbalances, in which the majority of negative sentiments towards the policy is 66%. The results obtained from the 10-fold Cross Validation with the binary classification (positive and negative sentiment) show that the accuracy value of the model is 69.49%, with precision and recall values of 53.27% and 74.26%.

The impact of green consumers on electric vehicle charging station diffusion based on complex network evolutionary game

The disparity between the supply and demand for public charging stations impedes road vehicle electrification. The public charging station, a socially produced artefact, is subject to customer preferences and government regulatory limits. However, traditional knowledge does not completely capture the complex dynamics behind the public charging station investment, and a combined interactive decision review is inadequate. To examine enhanced dynamic interactions, this paper provides a complex network evolutionary game model. According to the findings, subsidies for charging infrastructure construction are more vital than electric vehicle subsidies. Under present market conditions, removing the electric vehicle subsidy reduces the market percentage of charging stations by 6%, whereas removing the charging station construction incentive results in a 35% decline. Second, charging price and charging station diffusion has an inverted U-shaped relationship, and increasing the oil price slows charging station dispersion. Third, the construction cost has less of an influence on charging station diffusion. Finally, green consumer preferences are the key driver of public charging station investment. An increase in consumer preference from 0.17 to 0.38 would lead to a 30% increase in the market share of the charging station industry from 53% to 83%. Based on these results, policy implications for the investment in public charging stations are discussed.

How Cost-effective are Electric Vehicle Subsidies in Reducing Tailpipe-CO2 Emissions? An Analysis of Major Electric Vehicle Markets

We estimate the cost-effectiveness of plug-in electric vehicle (PEV) subsidies in reducing tailpipe-CO2 emissions in China, the U.S., and nine European countries. We find that the per-tonne cost of tailpipe-CO2 avoided increases linearly with the government-subsidized percentage of the PEV price. Costs are relatively higher in the Netherlands and Denmark, which subsidized high-priced PEVs including plug-in hybrids, and lower in the U.S., where PEVs replaced higher-emissions cars. Chinese PEV subsidies have a short-run static cost of up to $1,600 per tonne, far exceeding the social cost of carbon, suggesting that subsidies are more a part of China’s industrial policy than its carbon policy. When subsidy-induced PEV sales and power generation emissions are considered, the ordering of countries based on the cost-effectiveness of subsidies changes. The long-run dynamic subsidy cost is expected to be lower, as current subsidies may drive future innovation and sales, and due to grid decarbonization.

Pass-through of Electric Vehicle Subsidies: A Global Analysis

We investigate the pass-through of electric vehicle (EV) subsidies in 13 countries that account for 95 percent of global EV sales from 2013 to 2020. Our results indicate high pass-through rates of 70-80 percent on average. Pass-through is highest for global firms that sell the same EV models across multiple countries, consistent with uniform pricing by these firms, as well as avoidance of third-party arbitrage. We find suggestive evidence that pass-through is higher for tax incentives than for direct consumer subsidies.

Subsidy Phase-Out and Consumer Demand Dynamics: Evidence from the Battery Electric Vehicle Market in China

Abstract This paper quantifies the impact of battery electric vehicle (BEV) subsidy program in China. We build a structural model of dynamic demand and Bertrand Nash supply to study price elasticity and changes in production costs. The model highlights four channels through which the subsidy program impacts the market: the temporal elasticity, in response to a current price change, the intertemporal elasticity, in response to a future price change, and the multiplication effects through peer and learning by doing (LBD). Combining these estimates, we simulate outcomes under four subsidy schemes and find a phase-out policy could be the most costeffective while achieving higher sales promotion compared with alternative policies that provide larger subsidies over more prolonged periods.

Optimal electric vehicle subsidy and pricing decisions with consideration of EV anxiety and EV preference in green and non-green consumers

Electric vehicles (EVs) are an important part of the solution to climate change due to their reduction in carbon emissions. Purchase subsidies have been efficient tools in overcoming the cost barrier. In this paper, we formulate an analytical model to study the impact of EV anxiety and EVs’ environmental benefits on optimal subsidy and pricing decisions. We consider a market consisting of a vehicle manufacturer, a social planner and two segments of consumers: green and non-green. Both segments have EV anxiety. The manufacturer produces and sells both EVs and traditional vehicles. EV purchase decisions are influenced by consumers’ EV anxiety, preference for EVs, EV subsidy amounts, and retail prices for both EVs and traditional vehicles. Our results justify the necessity of a subsidy program in promoting EV sales. We identify the optimal subsidy under various market conditions. We further analyze how environmental benefit and consumers’ EV anxiety impact the optimal subsidy decisions. We find that it is optimal to offer the maximum level of subsidy when the environmental benefit is above a certain threshold value. Our results also show that the optimal subsidy either decreases or increases in consumers’ EV anxiety, depending on the level of environmental benefit of EVs. In addition, we show that EV anxiety has both positive and negative effects on the demand for EVs, but overall harms EV adoption.

The Effect of Early Electric Vehicle Subsidies on the Automobile Market

Subsidies have become increasingly popular for policy makers to promote the adoption of ecofriendly new technologies. Normally, the costs of these subsidies are nontrivial, underscoring the need to determine their efficacy. This work examines one subsidy used to steer consumers away from outmoded technologies and accelerate the adoption of green technologies: purchase subsidies for electric vehicles (EVs). On the one hand, such subsidies might cannibalize the market for traditional vehicles. On the other hand, such subsidies may result in overall market expansion, with little effect on traditional vehicle purchasing. Leveraging a phased subsidy rollout aimed at the early-stage EV market in China and a difference-in-differences approach, the authors find that subsidies strongly encourage EV purchasing but have little effect on traditional vehicle purchasing. This suggests that market expansion may result from the subsidy during the EV emergence and undermines the expected cannibalization on the traditional market. Further, the expansion effect is larger in cities with more severe air pollution. Finally, results reveal some level of cannibalization in cities of higher income and educational attainment. This suggests that although subsidies have yet to yield the intended cannibalization for the market overall, it is beginning to manifest in some parts of the market.

How the United States solved South Korea’s problems with electric vehicle subsidies under the Inflation Reduction Act

How the United States solved South Korea’s problems with electric vehicle subsidies under the Inflation Reduction Act

Driving a sustainable road transportation transformation

Driving a sustainable road transportation transformation