Stephen Holland, Erin Mansur, Nicholas Muller, Andrew Yates, 09 August 2015

Many countries provide subsidies and tax incentives for the purchase of electric cars, since it’s believed electric vehicles have various benefits. This column argues that it is difficult to justify a large uniform subsidy based on environmental benefits alone. In some states in the US, the subsidy should indeed be large and positive, but in others it should be large and negative. This conclusion may need to be revisited in the future as the electricity grid becomes cleaner.

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