Reaching 30% plug-in vehicle sales by 2030: Modeling incentive and sales mandate strategies in Canada
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Databank
Apr 29, 2019
Electric Autonomy Staff

Plug-in electric vehicles (PEVs) could play a strong role in decarbonizing the transportation sector, leading some governments to set the goal of PEVs accounting for 30% of new sales by 2030 (e.g., the “EV30@30” campaign). To explore the feasibility of this goal, the authors use a behaviourally-realistic vehicle adoption model (REPAC) to simulate the impacts […]

Reaching 30% plug-in vehicle sales by 2030_ Modeling incentive and sales mandate strategies in Canada

Plug-in electric vehicles (PEVs) could play a strong role in decarbonizing the transportation sector, leading some governments to set the goal of PEVs accounting for 30% of new sales by 2030 (e.g., the “EV30@30” campaign). To explore the feasibility of this goal, the authors use a behaviourally-realistic vehicle adoption model (REPAC) to simulate the impacts of incentives and vehicle mandates on PEV sales over this time frame, using the case study of Canada. A range of technology assumptions are considered, including optimistic and pessimistic battery cost scenarios ($CDN 85/kWh and $CDN 125/kWh, respectively, by 2030). According to their findings, the country’s present policies can only induce PEVs to reach 5–11% new market share by 2030. Without changes in PEV supply, they find that purchase incentives can boost PEV new market share, where a $CDN 6000/vehicle subsidy is needed for 13 years to reach the 2030 goal (in the median technology assumption scenario). They also model ZEV mandate scenarios where automakers must reach 30% or 40% PEV sales by 2030, finding that compliance with both is achievable even in pessimistic technology scenarios, through a combination of increased PEV model availability and intra-firm cross-price subsidies. While incentive-based or mandate-based strategies (or some combination thereof) can achieve 2030 goals, results demonstrate the high government expenditure involved in an incentive-based strategy — $CDN 15–48 billion undiscounted ($10–28 billion discounted), or around $9000–10,000 per added PEV sale. Policymakers ought to consider these tradeoffs, among others, when designing PEV-supportive policies to achieve long-term climate goals.

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