Financial incentives by country and corresponding EV market share for 2012. Source: Sierzchula et al. Click to enlarge.		National charging infrastructure by country and corresponding EV market share for 2012. Source: Sierzchula et al. Click to enlarge.
Although financial incentives and charging infrastructure were found to be strongly correlated to EV adoption, there was still tremendous variety between financial incentive and adoption levels. These differences are likely explained by country-specific factors—e.g., Estonia deciding to buy 500 MiEVs in 2012 or Belgium offering high financial incentives but perhaps not to the right market, noted lead author Will Sierzchula.

A second finding is that while the EV-specific factors are significant, broader socio-demographic variables such as income, education level, and environmentalism were not good predictors of adoption levels. This, they suggest, could be because national EV markets were so small relative to overall automobile sales.

Thus, while many EV consumers may have high levels of education and be passionate about the environment, within the perspective of a country such individuals still represent a tiny portion of the overall population. Therefore, socio-demographic variables may not provide a good indicator of adoption levels when comparing countries. If EVs emerge from a niche market, then socio-demographic data might be more accurately used to predict adoption levels at the national scale. Until then, EV-specific factors such as amount of charging infrastructure, level of consumer financial incentives, and number of locations that sell the automobiles are likely to be more correct for estimating a country’s market share.

—Sierzchula et al.

The Delft team collected and analyzed data from 30 countries for 2012. Data came from Australia; Austria; Belgium; Canada; China; Croatia; the Czech Republic; Denmark; Estonia; Finland; France; Greece; Germany; Iceland; Ireland; Israel; Italy; Japan; the Netherlands; New Zealand; Norway; Poland; Portugal; Slovenia; Spain; Sweden; Switzerland; Turkey; the United Kingdom, and the United States.

Data variables for each country in the study included EV market share; financial incentives; urban density; education level; an environmentalism indicator; fuel price; EV price; presence of production facilities; per capita vehicles; model availability; introduction date; charging infrastructure; and electricity price. EV adoption was operationalized as national market shares of electric vehicles.

Based on their findings, the authors suggested that “a sensible policy approach for addressing EV market failures” would be for governments to provide consumer subsidies and/or increase their number of charging stations. Because the charging station variable was the strongest predictor of EV adoption based on Beta values stress tests, their installation may be more effective than financial incentives, they noted. However, since these two factors are likely to be complimentary, supporting both measures could be expected to lead to higher market shares than focusing on either financial incentives or charging infrastructure alone, they added.

… this study also provides three notes of caution to countries that expect that they can achieve high EV adoption rates by increasing their levels of financial incentives or charging infrastructure. Firstly, the descriptive analysis identified several countries that displayed a relatively weak relationship between the two factors and EV market share. Secondly, it is possible that financial incentives or charging infrastructure mask other dynamics which are significant in driving EV adoption. Consequently, building policy only around those two factors may not support important underlying elements. Thirdly, due to the constantly evolving environment during the emergence of a radical innovation, industrial dynamics may change from year to year. Therefore, while this study does show that financial incentives and charging infrastructure are positively correlated to national EV market shares, it is definitely not evidence of a causal relationship and should be treated with prudence.

—Sierzchula et al.

Resources

• Sierzchula, W., et al. (2014) “The influence of financial incentives and other socio-economic factors on electric vehicle adoption” Energy Policy doi: 10.1016/j.enpol.2014.01.043i