University of California Institute of Transportation Studies

The true net environmental benefit of an electric vehicle is relative to the vehicle that an electric vehicle buyer would have bought and driven had they not opted for an electric vehicle. This “counterfactual” vehicle cannot be observed, but its fuel economy can be estimated. We use quasi-experimental variation in a generous California electric vehicle subsidy program to show that buyers of electric vehicles would have, on average, purchased fuel-efficient gasoline-powered cars had they not gone electric.