Abstract
Little is known about the demand for electric vehicles (EVs) in the mass market. In this paper, the research team exploits a natural experiment that provides variation in large EV subsidies targeted at low- and middle-income households in California. Using transaction-level data, the team estimates two important policy parameters using triple differences: the subsidy elasticity of demand for EVs and the rate of subsidy pass-through. Estimates show that demand for EVs amongst low- and middle-income households is price-elastic and pass-through is complete. THe research paper uses these estimates to calculate the expected subsidy bill required for California to reach its goal of 1.5 million EVs by 2025.
