A Review of International and Korean EV Policies and Implications
Dongsoon Lim *１ ． Introduction
Electric Vehicles (EVs) usually reduce or substantially negate fossil fuel use
in the vehicle. EVs are also a potentially significant technology to help abate
greenhouse gas (GHG) emissions and local air pollutions such as PMs. In recognitionof these benefits. Most countries set national goals of putting EVs on the roadwith strong policy supports. The policies include technological instruments suchas the R&D of the core parts and the development of the EV prototypes. In addition,thegovernments

arealsoconcentratedon

theEVpromotion,purchaseandregulations. So far, EV deployment has mostly been driven by policy. The major
markets such as US. China, Nordic countries, and Korea have been evolved by thestrong policy implementation.
This paper attempts to provide a review of international policy approaches thataffect EV adoption. These reviews are organized as demand - and supply- factors,
meaning characteristics of enhancing demand for EVs including policy incentives
suchassubsidiesandexemption,

stringency

ofenvironmental

regulations,availability of battery charging infrastructure , etc. Supply-side factors include
battery costs, driving range, and charging time. This study provides the effectof policies on development of EVs and explores the factors statistically thatwould

potential

influence

diffusionofEVs

andimplications

bycomparing

international and Korean experiences.

２ ． Methods of Analysis
With virtually zero emissions of end of pipe, EVs (and especially battery
electric vehicles [BEVs]) are emerging as one of the most promising technology
among all solutions being pursued today. The choice of focusing on BEVs is
motivated by the fact that they are highlighted as one of the most attractive
technology alternatives to Internal Combustion Engine Vehicles (ICEVs) in orderto achieve fossil independence and a more energy efficient transport sector.
Various ranges of policy instruments related to the promotion of EVs have been

*Professor, Ph.D., Department of Economics, Dongeui University, Busan, Republic ofKorea, dslim@deu.ac.kr, Tel: 82 010 2266 6543.

adopted in major global countries.
India,and Korea

have spurred

China, Europe, Japan, United States , recentlyEV consumer demandthrough a combinat ion ofinstruments including public procurement and investment plans, subsidies and otherfinancialincentives

addressing

bothEVpurchasepricesandcharging

infrastructure, fuel -economy standards and other policy measures, in particularincluding mandatory zero-emission vehicle (ZEV) standards . The primary focus of
this paper is to take inspiration from existing policy experiences to indicate
how to navigate the transition to mass market adoption of electric vehicles, while
meeting economic and environmental sustainability requirements. In addition, thisstudy compare policy approaches of Korea and other major countries.
To do so, we outlies the monetary and regulatory policy instruments that spur
EV adoption in the perspectives of demand and supply. First, policy instruments
are reviewed

to provide market

certainty andclear, strong

signals

to allstakeholders: consumers, vehicle and component manufacturers, including battery
design researchers and manufacturers, electric vehicle supply equipment (EVSE)
infrastructure suppliers. Second, the policy tools are compared to analyze how
they encourage the transition to widespread adoption of electric vehicles in eachregions. For example, we compare how financial incentives such as subsidy and tax
exemption, and public mandatory standards affect rapid adoption of EVs in thecountries
The approach we use to realize such goals is based on a stylized econometricdiffusion model of EV with a time-series analysis. There exist various diffusion
patterns including rapidly declining ones. Fourt and Woodlock (1960), in an early
study,

successfully

described

firstpurchasesofgrocery

productsbyanexponential model. Moe and Fader (1998) proposed a joint segmentation mo del ofconsumers and products and applied it to the sales of music albums, which show
rapidly declining diffusion patterns. From these studies we must recognize thatthe diffusion pattern of new product such as EVs, more precisely, the density
function of adoption times, f (t), can take any pattern from S-shaped one to Jshaped one in a continuous manner as shown in Figure 1 .
In EV diffusion rate analysis, we include prices and financial incentives,
relative prices of fuels, government procurements,

charging infrastructures,initiation periods of EVs, countries and r egions, especially Nordic countries,and stringency of environmental standards.

Figure 1. A Continuous View of Diffusion Patterns

EV shares = f (θ , x, p, φ ) + ϵ, (1)where p is a vector of national and regional instruments related to EV priceand financial incentives; x is a vector of relative prices of fossil fuels andelectricity;θinfrastructure;isφtheisadiffusionofvector

otherofmedium -andpreferences

high-speedandcharging

socio-economic

characteristics, including initiation years, environmental standards, and etc.
The preferences of a consumer are assumed to be affected by factors such asenvironmental awareness, geographical characteristics, the social net work, andprevious experiences. Additionally, ϵ is an error term containing random taste
shocks and other features of vehicle demand; for example, expectations of future
fuel prices, vehicle’ s second-hand market price, and the consumer's decision onwhen to buy a vehicle.

３ ． Results of Analysis

Major developments in China, the European Union, Japan, the United States, andKorea have been progressed. China, the European Union and India, which together
accountfor

roughly

60% oftheglobal

LDV market, proposed orimplemented

significant policy changes that are likely to accelerate the phase-in of electriccars and shape their deployment on a global scale. On the other hand, recent

announcements on the roll-back of federal regulations on the fuel economy of c ars
in the United States are expected to have a negative impact on the uptake ofelectric cars.
In EU, given that the current emissions level for a hybrid vehicle (HEV) withperformance characteristics similar to the average European car is close to 80
gCO2/km (NEDC), the implication of this regulatory proposal is that low - and zeroemission vehicles will be necessary in the 2030 framework to meet the overalltarget.16 The proposed regulation outlines a vision that includes production
shares of low- and zero-emission vehicles that reach 15% in 2025 and 30% or morein 2030. In China, annual mandatory minimum requirements on the number of NEV
credits that need to be earned are set for car manufacturers. Credits can beearned either through producing or impo rting new energy cars or through thepurchase of NEV credits from other manufacturers who have excess credits. TheUnited States Environmental Protection Agency (EPA) announced a change in the GHG
emissions standards for new light -duty vehicles sold in the United States between
2022 and 2025 (US Government Public Office, 2018). This decision results from anew determination following a mid -term evaluation of the standards, which was aregulatory requirement of the 2012 rule establishing the GHG emission sta ndardsfor the 2017-25 period. In the mid-term review, the EPA examined a range offactors, such as the penetration of fuel efficient technologies, fuel pricedevelopments,

vehicleelectrificationandconsumer

acceptanceofefficienttechnologies.
The Korean government announced a “Green Car Roadmap” in 2010 with the visionof Korea becoming one of the four leaders worldwide in global green car power.
This plan aimed to promote the green car industry and to increase rapidly thediffusion of EVs. Furthermore , a law, the “act on the promotion of development
and diffusion of environmentally -friendly vehicles,” was legislated in Korea toexpedite EV market penetration. As a part of this act, various incentives wereoffered to EV buyers to make these vehicles mor e attractive and competitive withICEVs. Despite these efforts, only 11.7 thousand EVs had been sold by the end of
2016; this number was slightly over 13% of the government target.

４ ． Conclusion
In this study, we examine global policy approaches and the determinants of BEV
adoption, with a focus on the EV diffusion. This study contributes with importantimplications for policy makers aiming at promoting the transition towards a fossil
independent vehicle fleet, where an increased BEV share is a highlighted solution.
Accordingtoourresults,

theglobal

policyinstrumentofpubliccharging

infrastructure has a significant and positive impact on the BEV adoption rate andit is also found to affect the BEV adoption to a higher degree in environmental
policies.

Furthermore,differences

in

the

expansionofpubliccharging

infrastructure across regions could explain different diffusion rates of BEVs.