Government money better spent on new charging stations, not tax breaks – study

A study in the US has come to the conclusion that money spent by the US federal government on tax breaks for buyers of electric vehicles may have been better deployed on new charging stations.

The conclusion was reached in a paper published by Lang Tong and Shanjun Li, researchers at Cornell University in New York state. Their study was partially funded by the US government’s National Science Foundation

Li, an assistant professor in environmental and energy economics, says that the US$7,500 ($9,650) tax credit offered by the US federal government to EV buyers “contributed to about 48.5 percent of electric vehicle sales from 2011 to 2013″.

The study estimates that the tax credit scheme will generate around US$200 million ($250 million) worth of environmental benefits over the long term.

Cut one way, one could conclude that the government’s policy is a success. Tong and Li, however, contend otherwise.

They estimate that the programme has cost the government US$1.05 billion ($1.35 billion) and for that amount of money the authorities could have installed 60,000 charging stations across the nation; there are around 120,000 petrol stations throughout the USA.

Had the government spent its money on new charging stations, the researchers argue, five times as many electric cars may have been sold in the States. Using figures from InsideEVs.com, we estimate that around 133,000 pure EVs were sold in the US between 2011 and 2014 out of a total of over 59 million vehicles.

The research paper notes that metropolitan areas with more charging stations have more EVs, with a 10 percent increase in charging stations per head of population leading to a 10.8 percent jump in electric vehicle ownership.

In the US the charging situation is complicated by the fact that regular home outlets are rated at 120V, which leads to much greater charging times than experienced in Australia that uses a 240V standard. To allow overnight charging, owners of pure EVs need to install a 240V outlet in their homes.


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