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Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles, and Opportunities

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  • James Archsmith
  • Erich Muehlegger
  • David S. Rapson

Abstract

This paper identifies and quantifies major determinants of future electric vehicle demand to inform widely held aspirations for market growth. Our model compares three channels that will affect electric vehicle market share in the United States from 2020 to 2035: intrinsic (no-subsidy) electric vehicle demand growth, net-of-subsidy electric vehicle cost declines (e.g., batteries), and government subsidies. Geographic variation in preferences for sedans and light trucks highlights the importance of viable electric vehicle alternatives to conventional light trucks; belief in climate change is highly correlated with electric vehicle adoption patterns; and the first $500 billion in cumulative nationwide electric vehicle subsidies is associated a 7%–10% increase in electric vehicle market share in 2035, an effect that diminishes as subsidies increase. The rate of intrinsic demand growth dwarfs the impact of demand-side subsidies and battery cost declines, highlighting the importance of nonmonetary factors (e.g., charging infrastructure, product quality, and/or cultural acceptance) on electric vehicle demand.

Suggested Citation

  • James Archsmith & Erich Muehlegger & David S. Rapson, 2022. "Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles, and Opportunities," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 3(1), pages 71-110.
    • Handle: RePEc:ucp:epolec:doi:10.1086/717219
    DOI: 10.1086/717219
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    Cited by:

    1. Epstein, Lucas & Muehlegger, Erich, 2024. "Ideology, Incidence and the Political Economy of Fuel Taxes: Evidence from California 2018 Proposition 6," Institute of Transportation Studies, Working Paper Series qt6k58771s, Institute of Transportation Studies, UC Davis.
    2. David Rapson & Erich Muehlegger, 2023. "Global Transportation Decarbonization," Journal of Economic Perspectives, American Economic Association, vol. 37(3), pages 163-188, Summer.
    3. Nico Brinkel & Thijs Wijk & Anoeska Buijze & Nanda Kishor Panda & Jelle Meersmans & Peter Markotić & Bart Ree & Henk Fidder & Baerte Brey & Simon Tindemans & Tarek AlSkaif & Wilfried Sark, 2024. "Enhancing smart charging in electric vehicles by addressing paused and delayed charging problems," Nature Communications, Nature, vol. 15(1), pages 1-10, December.
    4. Kristoffersson, Ida & Pyddoke, Roger & Kristofersson, Filip & Algers, Staffan, 2024. "Access to charging infrastructure and the propensity to buy an electric car," Working Papers 2024:4, Swedish National Road & Transport Research Institute (VTI).
    5. Muehlegger, Erich & Rapson, David S., 2022. "Subsidizing low- and middle-income adoption of electric vehicles: Quasi-experimental evidence from California," Journal of Public Economics, Elsevier, vol. 216(C).
    6. Andri Ottesen & Sumayya Banna & Basil Alzougool, 2022. "Attitudes of Drivers towards Electric Vehicles in Kuwait," Sustainability, MDPI, vol. 14(19), pages 1-16, September.
    7. David S. Rapson & James B. Bushnell, 2022. "The Electric Ceiling: Limits and Costs of Full Electrification," NBER Working Papers 30593, National Bureau of Economic Research, Inc.
    8. Gøril L. Andreassen & Jo Thori Lind, 2024. "Climate, Technology and Value: Insights from the First Decade with Mass-Consumption of Electric Vehicles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(7), pages 1783-1844, July.
    9. Halse, Askill H. & Hauge, Karen E. & Isaksen, Elisabeth T. & Johansen, Bjørn G. & Rauum, Oddbjørn, 2022. "Local Incentives and Electric Vehicle Adoption," Memorandum 1/2022, Oslo University, Department of Economics.
    10. David Austin, 2023. "Modeling the Demand for Electric Vehicles and the Supply of Charging Stations in the United States: Working Paper 2023-06," Working Papers 58964, Congressional Budget Office.

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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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