The cost of electrifying private transport - evidence from an empirical consumer choice model of Ireland and Denmark

Abstract

There is a growing consensus that moving to a low carbon future within the transport sector will require a substantial shift away from fossil fuels toward more sustainable means of transport. A particular emphasis has been given to battery electric vehicles (BEV) and plug in hybrid electric vehicles (PHEV), with many nations investing in improving their charging infrastructure and incentivising electric vehicle purchasing through offering grant schemes and tax relief to consumers. Despite these incentives, the uptake of BEVs and PHEVs has been low, while some countries, such as Ireland and Denmark, are in the process of removing the tax relief currently in place. This initial retraction has already been met with a fall in sales of BEVs and PHEVs, which is expected to continue decreasing as these incentives are further reduced. This study develops a socio-economic consumer choice model of the private transport sector based off national empirical data for Ireland and Denmark to analyse the long-term effects of these subsidy retractions, and to further analyse the policy measures and associated cost of moving toward a low carbon private transport sector.