Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/270960 
Year of Publication: 
2023
Series/Report no.: 
Ruhr Economic Papers No. 1015
Publisher: 
RWI - Leibniz-Institut für Wirtschaftsforschung, Essen
Abstract: 
Consumer subsidies are commonly employed to incentivize the purchase of battery electric vehicles (BEVs), but free-ridership potentially undermines their effectiveness. The present study investigates BEV subsidies in Germany, distinguishing their effect between company- and private cars. Drawing on a panel of high-resolution car registration data, we use the estimates from a Poisson pseudo-maximum likelihood model to predict BEV registrations in the absence of the subsidy. We calculate aggregate free-rider rates of 19% for private cars and 43% for company cars. We further find that the cost of the subsidy per induced BEV among private consumers is €5,400, while it is €7,215 among companies. Overall, the estimates suggest that the subsidy is considerably less cost effective among company cars, which comprise 55% of new BEV sales.
Subjects: 
Electric vehicles
consumer subsidy
company cars
free ridership
JEL: 
H23
L91
Q58
Persistent Identifier of the first edition: 
ISBN: 
978-3-96973-181-9
Document Type: 
Working Paper

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