Heterogeneity in Economic and Carbon Benefits of Electric Technology Vehicles in the US

To broadly contribute to sustainable mobility, electric technology vehicles (hybrid, electric, and plug-in-hybrid) must become more price competitive with internal combustion vehicles. This study assesses the economic and carbon benefits of electric technology vehicles in the U.S., accounting for household-by-household behavioral variability and geographical differences in fuel and electricity prices. This finer resolution provides insight into subsets of the population for whom adoption is economically or environmentally favorable, allowing us to construct marginal abatement cost curves for CO₂ that account for geographic, behavioral, and stock heterogeneities. Currently, low gasoline prices and high initial expense means that, without subsidies, few consumers benefit financially from electric technology vehicles (1.7% of drivers). However, improved technology dramatically and nonlinearly increases both the number of consumers that benefit and corresponding carbon emissions that could be abated without government subsidy. Our results clarify cost targets that electric vehicle technology must achieve in order to deliver net financial and subsidy-free environmental benefits.