The Interplay of Incentives, Electricity Price, and Demand on Transport Decarbonization: The Case of Electric Vehicles in the U.S.

Abstract

While extant research explores the impact of electric vehicle (EV) incentives on EV market shares, less is known about how such policies and other socioeconomic factors interact that ultimately affect the goal of transportation emission reductions. The study summarized herein employed a sample of 510 state-year CO $_{2}$ emissions datasets in the transportation sector spanning a decade (2010–2019) in a multiple linear regression model. Going beyond earlier studies, we find that, while a higher number of EV incentives would significantly contribute to transportation emission reductions, this effect could be dampened by population growth. In addition, we find that, while higher electricity prices may weaken the effectiveness of EV incentives, a high count of EV incentives is more effective in reducing CO $_{2}$ emissions than a low count of EV incentives when the electricity price is low. This finding implies that having multiple EV incentives can be effective in reducing transportation carbon emissions even in the face of rising prices of electricity. The study also examines the effectiveness of promoting the density of charging stations and alternative fuel incentives in advancing carbon emission reductions.