The transportation sector accounts for 24% of global greenhouse gas (GHG) emissions (IEA 2020). Road transport is the most utilized mode because of its convenience (Van Essen 2008). However, it is also the most emissions intensive mode, accounting for 75% of global transport GHG emissions, with roughly 44% coming from road passenger vehicles alone (IEA 2020).
Various subsidies for plug-in electric vehicles (PEVs) have been implemented worldwide at the federal, state and regional levels. These subsidies aim to promote PEV adoption to help reduce both local air pollution and greenhouse gas emissions (Hardman 2019). In the United States (U.S.), the federal government began subsidizing PEVs in 2010.
Our previous research found that promoting plug-in electric vehicle (PEV) adoption through financial subsidies is expensive. In this commentary, we explore how the cost-effectiveness of the PEV subsidy program has evolved over time. To understand this evolution, we developed vehicle choice model-based counterfactual simulations using annual United States (U.S.) new vehicle market share and vehicle characteristics data for each of the model years (MYs) from 2011 to 2017.