Impacts of the Federal Tax Credit on the Decision to Lease or Purchase a Plug-in Electric Vehicle

To mitigate climate change and air pollution, multiple US states and other countries have beensetting and adjusting goals and policies aimed at shifting sales from conventional, fossil-fuel–powered vehicles to plug-in electric vehicles (PEVs), defined as plug-in hybrid and battery electric (all-electric) vehicles. For example, US policies have offered federal tax credits for the purchase of PEVs, with limits set on how many PEVs from a single manufacturer, which PEVs, and which consumers qualify. A key to developing or adjusting these policies is understanding how financial incentives affect consumers’ decisions to purchase or lease PEVs. To better understand the impact of financial incentives on PEV leasing and purchasing, researchers at the University of California, Davis, analyzed survey responses from approximately 2,800 California PEV owners. The survey asked: If the federal tax credit were not available would you: purchase or lease the same PEV, switch to a different PEV, switch to a conventional or hybrid (non-plug in) vehicle, or not acquire a vehicle at all? This policy brief discusses findings from those survey responses and provides policy implications. View the NCST Project Webpage