Publication Detail

Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles and Opportunities

UCD-ITS-RP-21-101

Working Paper

Available online at: https://doi.org/10.3386/w28933

Suggested Citation:
Archsmith, James, Erich Muehlegger, David Rapson (2021) Future Paths of Electric Vehicle Adoption in the United States: Predictable Determinants, Obstacles and Opportunities. National Bureau of Economic Research Working Paper Series

This paper identifies and quantifies major determinants of future electric vehicle (EV) demand in order to inform widely-held aspirations for market growth. Our model compares three channels that will affect EV market share in the United States from 2020-2035: intrinsic (no-subsidy) EV demand growth, net-of-subsidy EV cost declines (e.g. batteries), and government subsidies. Geographic variation in preferences for sedans and light trucks highlights the importance of viable EV alternatives to conventional light trucks; belief in climate change is highly correlated with EV adoption patterns; and the first $500 billion in cumulative nationwide EV subsidies is associated a 7-10 percent increase in EV market share in 2035, an effect that diminishes as subsidies increase. The rate of intrinsic demand growth dwarfs the impact of demand-side subsidies and battery cost declines, highlighting the importance of non-monetary factors (e.g. charging infrastructure, product quality and/or cultural acceptance) on EV demand.

Key words: Public Economics, Taxation, Environmental and Resource Economics, Energy, Environment, Regional and Urban Economics