Identifying more efficient & equitable plug-in electric vehicle(PEV) financial incentives through consumer-centric design

Laura Roberson
John Paul Helveston
Ph.D. StudentAssistant Professor
lar1223@gwmail.gwu.edu
jph@gwu.edu

Department of Engineering Management & Systems Engineering, The George Washington University

Research Questions

1. How do different types of vehicle buyers value andprioritize different aspects of PEV financial incentives?
2. How can these preferences be used to design incentives
that are both more efficient & equitable for encouraging
PEV adoption?

Roadblock: Families with children andlower incomes are less eligible to receive
full EV tax credit

Income Eligibility for Federal Credit Married Filing Jointly (MJ) [2]Despite environmental promise, plug-in electricvehicle (PEV) adoption remains low

Valuation of Incentive Attributes
Preference forrebatedeliveredsoonerImmediate
rebate is $1,200
more valuable
than current
federal taxcredit

2019:PEVs just 1.9% of
total vehicle sales

IncomeApproach: Conjoint Analysis

High up-front cost is an established PEV adoption
barrier; Government subsidies help bridge gap• Willingness to pay for PEVs lower than cost of PEV• PEV financial incentives drive consumer adoption, including
direct positive impact on PEV market share

FederalTax credit of $7,500 [IRS] capped at 200,000 sales per OEM

StateVaries; including rebates, income tax credits, excise tax credits,
sales tax exemptions & other incentives [1]• Field choice-based conjoint survey via Dynata online survey
platform, targeting US respondents in vehicle market (Sept. 2021)• Estimate logit model and willingness-to-pay for incentive
attributes: type, time frame and source & compare differences in
preferences among sample demographics

Survey DesignSample

Incentive Attributes and Levels
TypeSales Tax
Exemption

Amount100%-50% ofest. sales tax

TimeFrameSource

Time of Sale

Gov’t

Tax Credit

Tax
Deduction

For lower
incomehouseholds,
immediate
rebate is $2,200
more valuable
than current
federal tax
creditRebateNew vs. Used Car Buyers$1,000 - $8,000 ($500 increments)
Time of Sale;At Tax Filing

Gov’t

Time of Sale;At Tax Filing 2 weeks after;
6 weeks after

Gov’t

Gov’t;
Auto
Manufacturer;
Dealer

Income<$50k 436>$50k 1,565
NA4

Total Sample
n = 2,005

Example Survey Question

New vs. UsedNew1,274
Used 731

Which incentive option would you choose?

References

Discrete Choice Model
Random utility model:

Estimated partworth
utility weight

Utility to person n fromchoosing alternative jUsed vehicle
buyers value
immediate
rebate overcurrent tax
credit more than
new vehicle
buyers

1. Wee, S., Coffman, M., & Croix, S. L. (2019). Data on U.S. state-level electric vehicle policies, 2010–2015. Data in Brief, 23.
https://doi.org/10.1016/j.dib.2019.01.006
2. Liu, H., Guensler, R., & Rodgers, M. (2021). Equity Assessment of Plug-In Electric Vehicle Purchase Incentives With a Focus on
Atlanta, Georgia. (E. Center for Transportation Decisions & Dollars (CTEDD). University of Texas, U. of T. at Arlington, & U. States.
D. of Transportation. U. T. C. (UTC) Program, Eds.). Retrieved from https://rosap.ntl.bts.gov/view/dot/54630

Observed
attributes
Unobservables•Multinomial logit: estimate the probability of choosing agiven alternative in the choice set and allows forflexible substitution patterns.
Willingness to Pay: convert model coefficients
across amount in order to discern value
WTP:•
Non-pricecoefs

Pricecoef••Policy Implications

Today’s federal PEV tax credit does not align with consumer
preferences especially lower income & used shoppers
Consideration for PEV rebates delivered sooner would further
incentivize PEVs

Further Work

Further heterogeneity modeling & simulation
Additional sampling < $50k income