A Tale of Two Investments: Charging Stations and Purchase Subsidies for EV Adoption
This article examines survey data from California and finds that a greater density of electric vehicle (EV) charging stations increases purchase rebates—incentives that benefit lower-income buyers.
Abstract
Purchase subsidies and public investment in charging infrastructure are both major policy approaches for promoting electric vehicle (EV) adoption, yet little is known about their interactions. If an increase in charging stations makes the purchase subsidy relatively less important in the purchase decision, the subsidy will be less cost-effective. Leveraging survey data in California, however, we find the opposite: specifically, that charging station density increases the additionality of purchase rebates, particularly for lower-income buyers, as it allows more marginal buyers to enter the EV buyer pool. Overall, our findings reveal a complementary relationship between charging availability and purchase subsidies, highlighting the benefits of mixing the two approaches and income targeting in optimal policy design.
