National Science Foundation On Electric Car Chicken & Egg Problem
Lang Tong and Shanjun Li, researchers at Cornell University in Ithaca, N.Y., stated that the best solution to increase electric car sales is to build more public charging infrastructure, which would help overcome the chicken & egg problem.
According to the study, there is a direct relation between EV sales and the number of charging points:
“The chicken: More charging options could lead to more sales
Tong and Li, whose research is part of a National Science Foundation (NSF)-funded INSPIRE project, contend limited infrastructure to support electric vehicles presents a major roadblock for greater acceptance.
The relatively small number of large-scale, public, vehicle-charging stations makes recharging electric vehicles inconvenient, if not impossible at times. Their analysis suggests that more charging stations are needed in parking garages in urban centers, parking lots in shopping malls and parking facilities in apartment complexes and business sites to accommodate consumer demand for convenient electric vehicle refueling.
Using a data set of quarterly electric vehicle sales in 353 metro areas from 2011 to 2013, the researchers found cities with more charging stations also have more electric cars. In their analysis, a 10 percent increase in the number of charging stations per million people in a city would result in a 10.8 percent increase in the market share of electric vehicles in that city.”
But the most important part of the study is that if subsidizing construction of charging stations is better solution to encourage EV sales, then the government should switch totally from tax incentives to infrastructure incentives as a cheaper, more effective way to reach US sales goals.
$7,500 tax credits contributed to ~48.5% of EV sales between 2011 and 2013, while the authors expect that the same amount of money would be sufficient to build 60,000 new charging points nationwide and that would increase sales five times.
If this is true, then the government is missing its EV sales goal by virtue of introducing the wrong incentives.
“The egg: Electric vehicle charging could use a policy boost
The convenience and cost of recharging them is not the only factor that influences the purchase of electrical vehicles.
“The $7,500 tax credit policy for which electric vehicle buyers are eligible contributed to about 48.5 percent of electric vehicle sales from 2011 to 2013, which is a significant portion,” says Li, who is an Environmental and Energy Economics assistant professor at Cornell. “It is important to note that indirect network effects explained 42 percent of that sales increase.”
By contributing to sales of nearly half the electric vehicles sold during the research period, some would consider the tax policy a success. Tong and Li take another view.
The researchers maintain the money, which amounted to some $1.05 billion in subsidies, could have been used to build more than 60,000 charging stations instead of giving it to electric vehicle consumers. That number of potential charging stations is significant; it represents about half the total number of gasoline stations in the United States.
Moreover, based on their analysis, Tong, Li and their research colleagues say, 60,000 new charging stations could have led to five times more electric vehicles sold.
However, they report the tax subsidies had a net positive effect. The subsidies during the 2011 to 2013 study period brought about $200 million in long-term environmental benefits.”
So, the egg was first, right?
Source: The National Science Foundation