(The) effect of purchase subsidy policy on the year-end sales of electric vehicle

Abstract

Purchase subsidy policies play an important role in the diffusion of electric vehicles (EVs). Many countries choose EV as a key technology to reduce greenhouse gases and have implemented purchase subsidy policies to promote the adoption of EV. Subsidy policies are broadly classified in a way that offering a constant amount of purchase subsidy in a certain period and reducing the amount of purchase subsidy over time. These policies have affected the EV sales, and the latter policy has greatly increased sales in year-end just before subsidies are reduced. This study examines empirically this phenomenon by analyzing EV sales and subsidy policies in 20 countries. The difference of impact of the two policies on the sales of electric vehicles was not found, with slightly higher EV sales in countries that have a year-end sales effect.