Tuesday, June 14, 2016

What are the Best Incentives to Buy an Electric Car?

Incentives for promoting Battery Electric Vehicle (BEV) adoption in Norway (12 page pdf, Kristin Ystmark Bjerkan, Tom E. Nørbech, Marianne Elvsaas Nordtømme, Transportation Research Part d 43, ScienceDirect, Jan. 14, 2016)

 Also discussed here: What are the most effective ways of promoting electric cars? (Science for Environment Policy, European Commission, Apr. 22, 2016)

Today we review research on which incentives are the most effective in selling battery electric (BEV) cars based on a survey of Norwegians. The survey analysis considered low and high income levels, the differing impacts of reduced (or subsidized) cost at purchase to ongoing costs and benefits such as exemption from tolls. The typical Norwegian owner of an e-car is male, aged 36-55, high income, university education and living in the capital (Oslo). The single biggest factor was the initial purchase price (with discounts), followed by (exemptions from) congestion or road pricing, followed by free access to bus lanes. This supports the tactics used by governments in countries, such as Canada, in offering significant discounts for new e-car purchases and less emphasis on using exemptions from road tolls (even though road pricing is much less used and there are far fewer electric cars on the road in this country compared to Norway).

 ecar incentives  

Key Quotes:

“Considering that 80% of increases in CO2 emissions the past 45 years have come from road transport … broad scale global introduction of electromobility is considered an important measure for reducing greenhouse gas emissions from the transport sector”

“Norway has become a global forerunner in the field of electromobility and the BEV market share is far higher than in any other country…. Seventy thousand BEVs are registered in Norway … accounting for approximately 18% of new car sales in 2015.”

 “Exemptions from purchase tax and VAT are critical incentives for more than 80% of the respondents…High purchase price is the strongest barrier toward EV purchase …and several studies find that up-front costs are more heavily emphasized than reductions in variable costs”

“Predominant incentives relate to tax or other economic benefits such as reduced/exempted parking fee or congestion charges, but in some instances also allow access to bus lanes or car pool lanes.”

“experts from five European countries rate 10 policy measures for EV adoption according to effectiveness, efficiency and feasibility. The experts’ cumulative ratings place exemption from road tolling or congestion charging in the middle-bracket in terms of effectiveness, while access to bus lanes is found at the bottom of the list.”

"The study also examines BEV users which respond to three categories of incentives:
(i) reduced fixed costs,
(ii) reduced use costs and
(iii) priority to infrastructure.
Analyses show that there are clear delineations between incentive groups, both in terms of age, gender, and education. Income is a less prominent predictor, which probably results from the competitive price of BEVs in the Norwegian market.”

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