Policies for Electrifying the Light-Duty Vehicle Fleet in the United States

Cassandra Cole, Michael Droste, Christopher R. Knittel, Shanjun Li, and James H. Stock

September 2021

The decarbonization of the light-duty vehicle (LDV) fleet in the United States is an important policy priority for the coming decades. This paper investigates the potential for government policy to accelerate the transition of the LDV fleet to electric vehicles. We consider several forms of government policy: subsidized construction of charging stations, refundable tax credits for electric vehicles, and a tradable permit system for vehicle manufacturers. Our objective is to evaluate forms of these policies that are capable of achieving a target 50% sales share of zero-emissions vehicles by 2030. Our results indicate that charging station subsidies are extremely effective relative to alternative proposals, as measured by impact for a given fiscal expenditure.

Keywords: Decarbonization, Electric Vehicles, Consumer Subsidies, Charging infrastructure
JEL Classification: H23, L62, R41

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