An assessment of electric vehicle incentives in urban areas

In this report, we discuss the role of the electric vehicle (EV) incentives in urban areas with respect to financing of the city growth agreements, demand for public transport and electrification of the car fleet. The assessment is based on existing relevant literature supplemented with some new calculations. Research suggests that the EV incentives have contributed to higher EV ownership, but most likely also increased car ownership and car use. I urban areas, increased car traffic is associated with substantial external costs in the form of congestion. Keeping the current road toll discount for EVs will make it challenging to finance the urban growth agreements. A lower EV discount will result in fewer car trips and somewhat more trips by public transport, but also more cycling and walking and fewer total trips. Calculations of total costs of ownership suggest that EVs will be relatively competitive even if some incentives are reduced.