Working Paper 001: The case for policies to target electric vehicle miles

The rationale for public support of battery electric vehicles (BEV) is sound. However, in spite of subsidies for vehicle purchase and other incentives, BEVs remain costly. Here, we argue that while lump-sum investment subsidies have some advantages at the very early stages of diffusion, given some salient developments in personal transportation, the timing is just right for a delivering subsidies in a more targeted manner. Use-based incentives together with financial assistance for BEV purchase and creation of a fast-charging infrastructure, would exploit the proliferation of high-use vehicles associated with on-demand transportation services while also continuing to support BEV adoption for private household use. Such a shift has the potential to deliver greater environmental benefits faster, directly benefit poorer households, and can be designed to minimize transaction costs.