What has driven the adoption of BEV and PHEV in the EU?

Abstract

Moving towards greater electric mobility in Europe is fundamental for energy transition and reducing fossil fuel dependence. This paper analyses the role of socioeconomic, environmental, and technical factors on the diffusion of battery electric vehicles (BEV) and plug-in electric vehicles (PHEV) into the market. Annual panel data from 2010 to 2020 for 25 European countries were used by recurring to the Driscoll-Kraay estimator. BEV and PHEV sales market share was employed to measure both vehicles' diffusion. The main findings indicate that the fast public charging stations drive the adoption of both BEV and PHEV. The normal charging stations block the adoption of BEV and have no significant impact on PHEV sales. This paper provides empirical evidence suggesting that higher income levels do not lead to substituting traditional vehicles for EV. Particular attention should be paid to the negative role of environmental tax revenues in adopting both BEV and PHEV. Our findings indicate that those paying additional taxes for polluting activities do not have the financial capacity to buy an EV. To address this situation, policymakers could incentivise the use of EV instead of encouraging purchases, providing, for instance, special prices at tolls.