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Rethinking electric vehicle subsidies, rediscovering energy efficiency

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  • Harvey, L.D. Danny

Abstract

Existing regulations regarding fuel energy intensity (MJ/km, litres/100 km, or its inverse, miles per gallon) of light-duty vehicles (LDVs: cars, SUVs, and pickup trucks) for 2025 or 2030 either fall short of the longterm technical potential, or contain numerous loopholes that undermine their effectiveness. At the same time, governments are subsidizing the purchase of electric vehicles (EVs) while the market share of SUVs and pickup trucks grows. This paper reviews the feasible fuel and/or electricity energy intensity of LDVs, and argues that the severity of impending anthropogenic global warming merits a strong policy approach that (i) prescribes significant improvements in the energy intensity of non-electric LDVs and plugin hybrid EVs (PHEVs) when running on fuel, (ii) is independent of the number of electric vehicles sold, and (iii) is accompanied by an overall limit on fleet-average CO2 emissions that applies to all manufacturers irrespective of the average size and mass of vehicles sold. Subsidies for EVs should be scaled back or eliminated, relying instead in the near term on deep across-the–board improvements in the fuel efficiency of LDVs that will have beneficial spillover effects on the eventual energy intensity of EVs and mineral requirements following a delayed market scale-up.

Suggested Citation

  • Harvey, L.D. Danny, 2020. "Rethinking electric vehicle subsidies, rediscovering energy efficiency," Energy Policy, Elsevier, vol. 146(C).
    • Handle: RePEc:eee:enepol:v:146:y:2020:i:c:s0301421520304833
    DOI: 10.1016/j.enpol.2020.111760
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    References listed on IDEAS

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    1. Sheldon, Tamara L. & Dua, Rubal & Alharbi, Omar Abdullah, 2023. "Electric vehicle subsidies: Time to accelerate or pump the brakes?," Energy Economics, Elsevier, vol. 120(C).

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