The classic “chicken-and-egg” issue that electric vehicles have been facing in the past few years, has been the leading reason why they haven’t gained a bigger market share so far, and why they still make up less than 1 percent of all new vehicle sales in the United States. Various solutions to this problem have been proposed and implemented, such as state and federal electric vehicle incentives, which include tax credits and cash rebates towards the purchase of an electric car, but they haven’t helped encourage too many consumers to buy a plug-in car, primarily due to the lack of supporting infrastructure.
That is why a new study suggests a different approach that could be more effective in promoting these alternative fuel vehicles than subsidizing purchases of electric cars. The National Science Foundation conducted a study on what tax credits have done to spur demand on EVs and how investment in charging infrastructure could help boost EV adoption, and found that funding infrastructure could be far more effective.
The study takes a look at electric vehicle sales between 2011 and 2013, along with tax credits allotted in the same period, in order to determine which factors affect the rate at which EVs are being adopted. Lang Tong and Shanjun Li, professors at Cornell University, conducted the study, and found that the government spent a total of $1.05 billion to subsidize the purchase of EVs between 2011 and 2013, and calculated that with that amount of money, about 60,000 charging stations could have been built. They go on to say that had the money spent on tax credits been used to install 60,000 charging stations, it would have increased EV sales by five times.
According to the researchers, the main reason why consumers are hesitant to buy electric cars is the lack of publicly available charging stations. That’s why they are saying that the government should ramp up investment in charging stations, in order to address the issue of scarce infrastructure, which is causing consumer reluctance to buy plug-in cars.
“As one might expect, there is a strong dependency between the growth of electric vehicle market share and the available charging options,” Lang Tong said.
They analyzed quarterly EV sales data in 353 metro areas from 2011 through 2013, and found that the areas that have a better charging infrastructure have more electric vehicles, as well. According to the study, a 10-percent increase of the number of charging stations in a city would result in a 10.8-percent jump in EV sales in that city. That being said, the researchers also found that federal tax credits have not been completely useless, as they were directly responsible for the purchase of 48.5% of the electric vehicles sold between 2011 and 2013. The federal government offers tax credits of up to $7,500 to consumers buying electric cars.
The results of the study could come in handy to the government in a time when it’s becoming quite clear that the goal of putting 1 million EVs on U.S. roads by the end of 2015, set by President Obama, will not be achieved.