Should Electric Vehicle Purchase Subsidies Be Linked with Scrappage Requirements?
The authors build a vehicle purchase and disposal model that accounts for trade-in opportunity costs to analyze a program that links an electric vehicle (EV) purchase subsidy with a gasoline vehicle scrappage requirement. The authors evaluate the program based on changes in sales and scrappage, subsidy dollars spent, and the degree of additionality, or the extent to which households make decisions beyond business-as-usual behavior. The authors measure two distinct forms of additionality—one involving the vehicle purchase decision, denoted as “purchase additionality,” and one for the scrap decision, denoted as “scrappage additionality.” The authors find that linking a purchase subsidy with a scrappage requirement is expected to result in fewer EV sales and less spending relative to a program without linking. While linking lowers purchase additionality relative to a program without a scrappage requirement, it leads to a high degree of scrappage additionality. The results highlight the importance of accounting for opportunity costs when evaluating subsidy policies.
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- Summary URL:
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Supplemental Notes:
- © 2022 Kevin Ankney and Benjamin Leard, Resources for the Future.
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Corporate Authors:
Resources for the Future
Washington, DC United States -
Authors:
- Ankney, Kevin
- Leard, Benjamin
- Publication Date: 2022-8
Language
- English
Media Info
- Media Type: Digital/other
- Features: Figures; References; Tables;
- Pagination: 30p
Subject/Index Terms
- TRT Terms: Electric vehicles; Purchasing; Sales; Subsidies; Waste disposal
- Subject Areas: Finance; Highways; Policy; Vehicles and Equipment;
Filing Info
- Accession Number: 01860339
- Record Type: Publication
- Report/Paper Numbers: Working Paper 22-13
- Files: TRIS
- Created Date: Oct 3 2022 4:08PM