This essay considers whether current electric vehicle (EV) subsidy policies are effective in reducing carbon emissions, focusing especially on how consumer behaviour and usage patterns impact net carbon emissions.  

There are four different premises and possible situations for buyers who are considering the adoption of EVs. Firstly, households that currently own no vehicle and will purchase an EV. Alternatively a buyer that owns an ICEV (Internal Combustion Engine Vehicle) and will replace it with an EV or own it as a second complementary vehicle. Lastly, a buyer that owns two ICEVs and will replace one of the ICEVs with a new EV.  

There is a paradox found in using EVs as a substitute not a complement. One paper described it as producing more “onerous preconditions for realising an emissions advantage” which is due to the fact that simple one-to-one substitution does not result in complete shift to EVs due to behavioural impacts of already driving a used car, considering that it is more likely that a person drives a more used car. Furthermore, putting miles on your new car is found to be less likely. This therefore decreases its pure economical value and environmental impact, due to its equivalent utilisation being less than that of an ICEV. Therefore, I believe that one way in which one could tackle this problem is to have a tiered subsidy policy which puts greater weight on the conditions that provide more environmental impact. 

In an article discussing subsidy policies it was stated that  “behavioural precursors may disproportionally enable emissions advantage delivery”. This statement emphasises how the difference in effect of owning an EV is greatly influenced by the cars that you own, as a result of this innovative EV technology. Thus, there is a certain ambiguity as to whether any expected results will truly be correct considering that behavioural economics is impossible to predict. Many also believe that investment in infrastructure would result in ideas of distance scepticism to fall, causing more people to convert to EVs. Also, there are procurement incentives. These are widely leveraged policy levers used to simulate EV sales. Therefore, if these policies are more targeted to incentivise the switching of primary vehicles to EVs, or possibly incentivise increased use of public transport, they will have a better impact on CO2 emissions, as these methods of transport consist of a large percentage of total CO2 emissions. If dealt with properly these methods of transport can have an extremely positive effect on CO2 emissions. 

To conclude, one way in which governments could more effectively incentivise EVs is by shifting EV policies from front-loaded purchase subsidies to performance-based incentives that reward actual emission reductions over time, particularly by supporting high-utilisation lower-income drivers through the second hand EV market, allowing a cheaper and cleaner alternative in the future. This could be done on a gradual basis by increasing the reward received as different targets are met. Alternatively, a vested/unvested system could be used to increase longevity. This would consist of an initial procurement incentive and then a gradual mileage-linked bonus so that people are more obligated to fulfil their targets if they want to claim the unvested amount of cash by a certain stage.