Incentive Policies for Neighborhood Electric Vehicles

This report explores the incentives currently available for the production, sale, and use of neighborhood electric vehicles (NEVs), and suggests other incentives that could be implemented. NEV incentives are needed because the use of NEVs on a large scale would provide significant air quality benefits. NEVs produce no tailpipe emissions and could replace the vast majority of short, heavily-polluting trips. NEVs could also reduce greenhouse gas emissions, increase energy efficiency, enhance energy security, reduce the land-use demands of the automobile system, and promote the development of more “livable” communities. In addition to the California Air Resources Board zero-emission vehicle mandate, a variety of other federal, state, and local incentives are available to manufacturers and purchasers of NEVs. This report explores the details of these incentive programs, with a particular focus on the specific vehicle definitions used by each. These definitions are important because not all NEV designs may qualify for incentives available to full-sized electric vehicles. Following a discussion of the incentives currently available to NEV manufacturers and consumers, recommendations are made for other incentives that could most effectively encourage the introduction and use of these clean, efficient vehicles.