Effectiveness of Monetary and Non-monetary Incentives on the Purchase of Plug-in Electric Vehicles Considering National and Regional Frameworks Within the European Union

Effectiveness of Monetary and Non-monetary Incentives on the Purchase of Plug-in Electric Vehicles Considering National and Regional Frameworks Within the European Union


Christoph Schimeczek, German Aerospace Center (DLR) Institute of Vehicle Concepts, Enver Doruk Özdemir, German Aerospace Center (DLR) Institute of Vehicle Concepts, Stephan Schmid, German Aerospace Center (DLR) Institute of Vehicle Concepts


This paper investigates country-specific total cost of ownership of electric mobility for different vehicle owners and usage patterns. A utility function approach is used to incorporate non-monetary aspects.


Municipalities and national governments struggle to meet the ever increasing challenges for the road transport system posed by climate change and urbanisation. Electric mobility is expected to reduce local emissions of noise, air pollutants and greenhouse gases and is, thus, promoted by measures differing across nations and regions in the European Union. However, the effectiveness of these incentives with respect to their impact on the uptake of electric mobility is yet not fully understood. This is partly due to the fact that currently installed incentive measures differ in the European countries and exhibit heterogeneous effects on electric vehicle registrations [1], [2]. The lack of understanding hampers the identification of best practise measures and their transfer to other regions and countries. This study aims to fill this gap and provide integral insights on the impact of incentives upon EV-uptake considering national and regional frameworks. Incentive schemes in the United Kingdom, Germany, Austria, the Netherlands and Spain were investigated with respect to different new-vehicle customer types, e.g. private customers or commercial fleet operators, which were in turn differentiated by fleet type, e.g. car rental, car sharing, and company fleet with or without private usage).
These schemes were integrated in a publicly available web-tool featuring total cost of vehicle ownership (TCO) calculations. Compared to various previous TCO calculations [3]–[5], this comprehensive and up-to-date calculation model includes purchase cost and resale values, profit tax reliefs, maintenance and repair cost, fuel and energy cost, motor vehicle taxes as well as purchase taxes and monetary incentives. Additionally, cost due to range limitations were considered for battery electric vehicles. A utility function was also applied to include non-monetary aspects and incentives, i.e. well-to-wheel CO2 emissions, parking privileges, permissions to use bus lanes and driving dynamics. For company car ownership, third party cost items, e.g. benefit in kind taxes for employees, were also considered by the utility function. The total utility, which combines monetary and non-monetary aspects, of conventional and plug-in electric vehicles were then compared considering different passenger car sizes as well as light commercial vehicles.
This approach allows the quantification of impacts caused by different incentive measures on the vehicle utility differentiated by not only customer types but also vehicle usage patterns, additionally considering regional frameworks. The results may well be used for recommendations regarding incentive policies for local and national decision-makers.

[1] N. Fearnley, P. Pfaffenbichler, E. Figenbaum, and R. Jellinek, “E-vehicle policies and incentives - assessment and recommendations,” COMPETT, Project report, 2015.
[2] P. Mock and Z. Yang, “Driving Electrification,” ICCT, 2014.
[3] B. M. Al-Alawi and T. H. Bradley, “Review of hybrid, plug-in hybrid, and electric vehicle market modeling Studies,” Renew. Sustain. Energy Rev., vol. 21, pp. 190–203, May 2013.
[4] A. Rousseau, T. Stephens, J. Brokate, E. D. Özdemir, M. Klötzke, S. A. Schmid, P. Plötz, F. Badin, J. Ward, and O. T. Lim, “Comparison of Energy Consumption and Costs of Different Plug-in Electric Vehicles in European and American Context,” EVS 28 Task 25, 2015.
[5] G. Wu, A. Inderbitzin, and C. Bening, “Total cost of ownership of electric vehicles compared to conventional vehicles: A probabilistic analysis and projection across market segments,” Energy Policy, vol. 80, pp. 196–214, May 2015.


Association for European Transport