Incentive policies for the purchase of green, electric or hybrid vehicles are associated with an increase in their adoption, according to a study by the Faculty of Business Administration. The magnitude and duration of these effects appear to be greater for the purchase of electric vehicles.
"Incentives for the purchase of zero-emission vehicles increase their adoption by more than 113%, compared with 81% for hybrid cars," points out Professor Julien Lépine , one of the study’s authors.
To identify these trends, the team studied data from around 30 European countries, from 2012 to 2021. "The analysis in the article shows the significant effect of financial support for purchase. The cost of purchase therefore seems critical for consumers", summarizes Professor Lépine.
The research compared the effects of purchase incentive policies with those of the economic benefits of owning a green vehicle, such as discounts on parking, free access to toll roads or a discount on registration. The measures for vehicle ownership had no effect. "If we only have these kinds of incentives, it’s not enough to increase the adoption of electric cars," reports the researcher.
The impact of the purchase incentives was observed over a period of at least four years. The team noted a snowball effect. "We noticed that the effects were not instantaneous once the subsidies came into effect. The adoption rate peaks in the second year, and the effects continue in the four years following deployment," explains Julien Lépine.
And what happens when a subsidy is withdrawn? "The adoption rate of electric vehicles returns to pre-subsidy levels," says the researcher.
Optimal conditions for adoption
The effects of incentives were not heterogeneous among the countries studied. The country’s wealth, gasoline prices and abundance of renewable energies influenced the adoption rate of electric vehicles.For countries considered less affluent, with a gross domestic product of less than US$31,000 per capita, government subsidies played an even greater role than in affluent countries. This suggests that vehicle prices and people’s ability to pay are critical for car electrification," argues Julien Lépine. But even if people have high incomes, they need subsidies to adopt electric vehicles."
For countries with several renewable energy sources, subsidies also helped adoption. "This result suggests that people are aware that, when you make electricity with green energy, using an electric vehicle means you emit very few greenhouse gases," reports Julien Lépine.
"In Canada and Quebec, we have all the factors that would make it possible for a subsidy to help electrify quickly," says the professor.
As for the price of gasoline, no effect was observed. "According to our results, increasing the price of gasoline would not necessarily result in people buying more electric vehicles," reports Julien Lépine.
The study deals with personal vehicles, but the same observations could apply to heavy vehicles.
The study was published in the journal Transportation Research Part A. The study’s signatories are doctoral student Edlaine Correia Sinézio Martins, Professor Jacqueline Corbett and Professor Julien Lépine.
