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Policymakers at different levels of government—local, regional, federal—can incentivize electric vehicle (EV) deployment through a variety of policies.

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Introduction

Policymakers at different levels of government—local, regional, federal—can incentivize electric vehicle (EV) deployment through a variety of policies, only some of which involve direct financial assistance. Financial incentives such as tax credits, rebates, and reduced import tariffs help reduce the upfront cost of purchasing an EV. Other financial incentives, such as reduced vehicle registration fees and specialized tariff design, can decrease the cost of owning, fueling, driving, and parking an EV. Fuel economy standards and zero-emission vehicle mandates can also stimulate EV markets. Preferred parking, access to toll roads, and other non-financial policies can also create an enabling EV environment.

Table 1: EV-Related Policies in Selected Regions

 

 Canada  

 China  

European Union 

 India 

 Japan 

United  States 

Examples

Regulations (vehicles)

Zero emission vehicle (ZEV) mandate

✓*

 

 

 

 

✓*

California ZEV regulation

 

Fuel economy standards

Japan 2030 Fuel Economy Standards

Incentives (vehicles)

Financial incentives

 

India Tax Credit for EV Purchases

Targets (vehicles)

 

✓*

Ontario’s Climate Change Plan

Industrial policies

Subsidy

 

 

 

2020-2022 China New Energy Vehicles subsidies

Regulations (chargers)

Hardware standards**

U.S. Society of  Automotive  Engineer (SAE) Heavy-duty vehicle EVSE requirements

Building regulations

✓*

✓*

 

✓*

U.S. EV Building Codes

Incentives (chargers)

Financial incentives

 

✓*

Japan’s Incentive for New Clean Energy Vehicle Purchases

Targets (chargers)

 

✓*

European Union’s 2020 Alternative Fuel Infrastructure Targets

*Indicates the policy is only implemented at a state/province/local level.

** Standards for chargers are a fundamental prerequisite for the development of EV supply equipment. All regions listed here have developed standards for chargers. Some (China, European Union, India) are mandating specific standards as a minimum requirement; others (Canada, Japan, United States) are not.

‘✓’ indicates that the policy is set at national level. Building regulations refer to an obligation to install chargers (or conduits to facilitate their future installation) in new and renovated buildings. Incentives for chargers include direct investment and purchase incentives for both public and private charging.

Source: International Energy Agency - Global EV Outlook 2019


Power sector regulators play a key role in establishing grid- and customer-friendly electricity tariffs that can help shape an EV market. Power sector regulators also determine the role of regulated utilities in charging infrastructure development, which may span from minimal involvement to creating targeted “make-ready” investments for electric vehicle supply equipment (EVSE) to full utility-ownership of EVSE.

New technologies, such as EVs, can struggle to become mainstream without a larger ecosystem of trained, skilled professionals to service vehicles, install charging infrastructure, market and sell vehicles, and even respond to accidents and emergencies. Policymakers can play a large role in workforce development and consumer education and protection initiatives that underpin a robust and sustainable EV-friendly ecosystem.

Key Actions for EV Market Development

To address EV policy and regulatory needs, decision-makers can take the following actions:

  • Explore grid-friendly tariff design for charging EVs and managed charging technologies that balance customer and grid needs.
  • Assess key fiscal and non-fiscal incentives for EVs that are appropriate for individual contexts.
  • Understand gaps in the workforce needed to support EV deployment and tailor policies and programs to address any gaps.
  • Evaluate barriers to utility ownership of EVSE.

Reading List and Case Studies

Effectiveness of Electric Vehicle Policies and Implications for Pakistan

National Renewable Energy Laboratory, 2020

This report explores the impact that policies such as financial incentives, road access policies, EV mandates, fuel taxes, discounted electricity rates, charging infrastructure, and government investment in the domestic automotive industry have on EV market penetration. It reviews EV policies in countries that have demonstrated success deploying EVs or promoting local EV production, focusing on Norway, China, the United States, India, Korea, Thailand, Indonesia, the Philippines, and Vietnam. The report is targeted toward Pakistan, which is in the process of adopting EV promotion policies, but it is applicable to policymakers throughout the world.

Foundations of an Electric Mobility Strategy for the City of Mexicali

National Renewable Energy Laboratory, 2020

This report seeks to formulate a customized, practical, and data-driven framework to enable the city of Mexicali to transition their transport sector to cleaner electric mobility. The report discusses how Mexicali can utilize vehicle fleets as early adopters of plug-in electric vehicle technology, including ways to prioritize fleets for electrification, incentivize fleets to purchase plug-in electric vehicles, and understand how to transport electrification can facilitate mass transit.

E-Mobility Options for ADB Developing Member Countries

Asian Development Bank, 2019

This publication compiles knowledge and data on EV options in Asia and provides the results of consultations done with stakeholders in selected countries. The insights and recommendations can be used by policy makers and transport company managers interested in designing the appropriate policies to support EV adoption and choosing the appropriate modes and models for their countries and cities.

The Role of Demand-Side Incentives and Charging Infrastructure on Plug-In Electric Vehicle Adoption: Analysis of U.S. States

The Fletcher School, Tufts University, and National Renewable Energy Laboratory, 2018

This article quantifies the influence of key incentives and enabling factors like charging infrastructure and receptive demographics on plug-in EV adoption. The study focuses on three central questions. First, do consumers respond to certain types of state-level vehicle purchase incentives? Second, does the density of public charging infrastructure increase plug-in EV purchases? Finally, does the impact of various factors differ for plug-in hybrid EVs, battery EVs, and vehicle attributes within each category?

The Global Electric Vehicle Policy Database

United Nations Environment Programme, 2018

The Global Electric Vehicles Database contains information on fiscal, regulatory, and other electric mobility-related policies in countries around the world. The database can be downloaded for free.

Electric Vehicle Guidebook for Indian States

The International Council on Clean Transportation, 2019

This report examines EV promotion policies from around the world that were adopted to address five consumer barriers: model availability, cost competitiveness, fleet deployment, usage convenience, and consumer understanding. While the scale of the challenges varies by market and fleet, these barriers are common, and the guidebook identifies strategies to overcome each of the five.

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