How are new-energy vehicle sales affected by government support? U.S. geospatial evidence

Abstract

Despite the low crude oil price that has been declining since 2014, the market for electric and hybrid-electric vehicles has grown steadily and reached one million on the road in America in 2015 which itself proves high topicality of research concerning factors affecting new-energy vehicles dissemination in the different states of US. In current paper, we study the effectiveness of government policies on a best-selling hybrid-electric vehicle (HEV) by using proprietary and novel datasets of sales information in 3,000 United States counties while controlling for detailed and unique demographic and governmental factors since 2005, in the initial stage of hybrid car introduction. First, we find that state tax waivers, state income tax credits, and high-occupancy-vehicle lane access are important in HEV sales. Second, HEV tax incentives from the federal government show the negative relationship with HEV sales. These results suggest that the federal government should entrust state governments with promotion policies for HEVs. Third, income level and commuting time do not significantly affect consumers' decision to switch to hybrid vehicles. Fourth, a person who spends a considerable amount of time in a vehicle or is already taking public transportation is unlikely to switch to a new vehicle type: New products should be first marketed to first-time car buyers. Geospatial analyses are followed to study spatial dependencies. We proved that HEV sales in the country is highly connected with proper state support policies at regional level. © 2016 Institute of Society Transformation.