Sustainable Energy Seminar Series

Name: Sustainable Energy Seminar Series
Start: 2022-05-02T15:30:00
End: 2022-05-02T15:30:00
Location: Wisconsin Energy Institute

May 2, 2022 3:30 PM

RSVP

Wisconsin Energy Institute 1552 University Ave., Madison, Wisconsin 53726

April 28, 2022

6:40 PM

media release: With the easing of COVID restrictions on campus and Dane County, members of the public are now welcome to attend our seminars in person at the Wisconsin Energy Institute. The online/livestream option is still available for anyone who wishes to do so, and masks will be available to anyone who wishes to use one in-person.

May 2: Registration for online participants is required via Zoom at this link.

3:30-4:30pm, 1130 Wisconsin Energy Institute

Consumer Tax Credits for EVs: Some Quasi-Experimental Evidence on Consumer Demand, Product Substitution, and Carbon Emissions - Cheng He, assistant professor, business

Abstract:

Governments worldwide have spent billions of dollars on monetary incentives for consumers to encourage the adoption of eco-friendly (“green”) products. There is little consensus on the effectiveness of delayed monetary incentives with complex structures such as tax credits. We examine tax credit incentives’ impact on vehicle sales and carbon emissions using incentive changes in South Carolina and Oregon via various quasi-experimental approaches and assess the generalizability of our findings to Colorado. Unlike recent studies showing an insignificant or a negative correlation between tax credits and electric vehicle adoption, we find unit sales of incentivized plug-in-hybrid electric vehicles–PHEVs–increase by an average of 3.7% following a $2,000 incentive. PHEV sales remain unchanged after the incentive's termination, implying a positive net sales effect. We also explore the incentive's impact on purchase funnel stages. In the awareness stage, the incentive’s positive effect on PHEV demand peaks around the tax-filing period. As for the consideration stage, the incentive does not expand the consumer pool considering PHEVs. In the conversion stage, the incentive generates more sales for PHEVs in counties where 1) consumers are more likely to have PHEVs in their consideration sets regardless of the incentive (i.e., Democratic counties), and 2) consumers value cost-saving more (i.e., counties with lower-middle income). The heightened demand for PHEVs stems from the substitution from gasoline vehicles with high fuel efficiency. The estimated cost of reducing carbon emissions through tax credits is less than the cost of tax rebates for conventional hybrids and subsidies for residential solar panels.