California has adopted aggressive vehicle electrification goals as a means of reducing urban air pollution, carbon emissions, and overall petroleum consumption. The state has several programs to encourage electric vehicle adoption, including the Enhanced Fleet Modernization Program, which was initially piloted in two California air districts and recently expanded to other regions. The program offers subsidies to low- and middle-income residents to scrap their old higher-polluting vehicle and purchase lower-polluting hybrid, plug-in hybrid, and battery electric vehicles, with more generous incentives for residents in disadvantaged zip codes. The extent to which this and other incentive programs help to achieve environmental policy goals depends on the emissions reduced by electric vehicles, and the emissions of the vehicle that would have been purchased had the consumer not chosen an electric vehicle. A household that purchases an electric vehicle will generate a larger environmental benefit if it would have otherwise purchased a gas guzzler rather than a gas sipper. The choice of replacement vehicle also has important implications for projecting future fuel tax revenues. If EVs replace gas sippers, fuel tax revenues will decline more slowly. If they replace gas guzzlers, fuel tax revenues will decline more quickly. To answer these questions, researchers at UC Davis compared the average fuel economy of vehicles purchased in disadvantaged zip codes inside and outside of air districts participating in the Enhanced Fleet Modernization Program, before and after the program began. This quasiexperimental design gives a reasonable estimate of what would have happened without the subsidy.

Adoption of alternative fuel vehicles by African-American, Hispanic and low-income consumers has lagged adoption by Asian, White and high-income consumers. Understanding the low-rate of adoption for certain demographic groups is of particular interest to California. In 2015, the Clean Energy and Pollution Reduction Act (SB 350) was signed into law and requires the California Air Resources Board (CARB) to study barriers to zero-emission transportation options faced by low-income consumers. This study analyzes data for over 400,000 California vehicle sales between 2011and 2015, containing information on the price paid by the consumer, the location of dealership, the zip code of the buyer and buyer demographic characteristics (e.g., race, gender, income, age) for each transaction. Researchers test for the presence of two commonly asserted barriers to electric vehicle (EV) adoption: (1) price discrimination against low-income consumers and (2) limited selection of EVs at dealerships proximate to disadvantaged communities, by comparing the prices and distance traveled for buyers of EVs in different demographic groups.  As a control, researchers compare EV sales to sales of internal combustion engine (ICE) cars. Researchers find little evidence that price discrimination amongst demographic groups or differences in EV availability explain low rates of EV adoption.

This report presents evidence that gasoline prices have a larger effect on demand for battery electric vehicles (BEVs) than do electricity prices in California. A spatially-disaggregated panel dataset of monthly BEV registration records was matched to detailed records of gasoline and electricity prices in California from 2014-2017, and the matched data was used to estimate the effect of energy prices on BEV demand. Two distinct empirical approaches (panel fixed-effects and a utility-border discontinuity) yield remarkably similar results: a given change in gasoline prices has roughly four times the effect on BEV demand as a similar percentage change in electricity prices.