UC Davis

Monetary incentives offered by the state of California have historically played a critical role in driving zero-emission vehicle (ZEV) adoption. Although most ZEV adoption thus far has been by early adopters with relatively high income, some research on the market development of electric vehicles showcases that financial incentives are also significant for relatively lower-income ZEV buyers. Regarding early adopters, a meta-analysis conducted for this study finds that an increase in the ZEV adoption rate by 5% on average is associated with a $1,000 incentive, keeping all else constant. The meta-analysis combines results from 13 studies based on a variety of markets, i.e., the Plug-in Hybrid and Battery Electric Vehicle (PEV) market in California, other states of the United States (US), and other mature EV markets across the globe. As the ZEV market is moving beyond mostly higher-income early adopters toward lower and moderate-income buyers, more adopters may need incentives to purchase ZEVs. The state of California is supporting lower-income buyers in their ZEV purchases through point-of-sale financial incentive programs such as the Clean Vehicle Assistance Program (CVAP). CVAP also provides grants for PEV charging and affordable financing to help income-qualified Californians purchase or lease a new or used ZEV. Since CVAP is a relatively new program, there is less quantitative research on its effectiveness on low- to moderate-income buyers' decisions. The main results in this study are from a quantitative analysis that uses a binary logistic regression model where the dependent variable is a survey question where buyers indicate if they would still purchase a PEV without the CVAP grant. Specifically, program participants respond to the question, “Would you have purchased your clean vehicle if you did not receive a grant through the Clean Vehicle Assistance Program?”. This question is from a survey designed by the California Air Resources Board (CARB). The descriptive analysis showcases that the grant offered by CVAP influenced around 86 percent of the recipients from lower-income households to purchase a PEV. The logistic regression model indicates that buyers with the following characteristics are more likely to respond “no” to the above question: older age, not possessing a college degree, lower household income, and being non-male. They are also more likely to respond “no” when purchasing new, less expensive vehicles and when renting rather than owning their own home.