**1. Introduction**

In order to lower greenhouse gas (GHG) emissions and to help achieve the goal of climate change mitigation, electric vehicle (EV) adoption has been discussed worldwide. Policies aiming to incentivize consumers have been widely adopted by governments in North America, Europe, and Asia. The effectiveness of policies to increase the market share of EVs has always been discussed in the literature.

We all know that the higher acquisition cost of electric vehicles compared to conventional vehicles is one of the important barriers to adoption, due to R&D investment and fixed asset investment of the car manufactures. For a new environment-friendly technology, the barriers also include the lack of knowledge for consumers and low consumer risk tolerance [1], leading to an inefficient allocation of goods and services, known as a market failure in economics. Thus, adopting policy incentives is reasonable to fix the market.

As for electric vehicles, policy incentives include financial incentives and non-financial incentives. Table 1 is adapted from reports of International Energy Agency (IEA), listing the existing policies in some selected countries in 2018/2019 [2]. Financial incentives consist of direct purchasing subsidy, registration/emission/tax fee exemption, etc., which are most widely used worldwide to lower the initial purchasing cost and cost in daily use. The authors of [3] studied financial and tax incentive policies in Norway based on a survey and found that tax exemptions were significant motivators for more than 80% of the respondents. Moreover, [4] concluded that the markets with high EV penetration, such as Norway, the Netherlands, and the State of California, were mainly attributed to supportive incentive policies. However, existing literatures have conflicting results regarding the effectiveness of financial incentives. The authors of [5] found that financial incentives were significantly correlated to

EV uptake, whereas [6] showed a very weak correlation between purchase subsidies and consumers' willingness to buy EVs. There are literatures show that repealing incentives may result in a sharp drop in sales. For example, the U.S. state Georgia experienced a drop in EV sales by over 80% after the state government repealed the tax credit [7] and [8] found that when subsidies and tax exemption for EVs are abrogated with no change to other policies, the market share of EVs will suffer a sharp fall by 42%. Thus, it is important to explore the crucial factors influencing EV adoption.


**Table 1.** Electric vehicle (EV)-related policies in selected regions.

\* Indicates that the policy is only implemented at a state/province/local level. \*\* Standards for chargers are a fundamental prerequisite for the development of EV supply equipment. All regions listed here have developed standards for chargers.

As substitutes and complements of financial incentives, non-financial incentives and public charging infrastructures also matter a lot to EV adoption. Non-financial incentive policies are designed for the convenience of EV users and vary across countries, such as free parking policy, toll tax exemption, highway lane excess, etc. The authors of [3] supported that convenience measures such as free parking are very effective for an increase in EV sales using stated preference (SP) data. Based on a large number of EV consumers, free access to bus lanes and exemption from toll taxes were the crucial factors for EV adoption. Furthermore, [9] attributed about 25% of California's EV sales to high-occupancy vehicle (HOV) lane access policy. However, [10] demonstrated that access to bus lanes and road toll waivers are not statistically significant, whereas charging infrastructures are a strong predictor to EV adoption. The authors of [5] drew a similar conclusion regarding the relationship between the market share of electric vehicles and the number of charging stations per capita on national level.

Besides, government regulations are important factors to facilitate EV sales, targeting both consumers and automobile manufacturers, usually including setting goals for EV uptake, restricting the fuel used and mandating the EV production. A few examples of such regulations are GHG standards, a zero-emission vehicle mandate, and a low-carbon fuel standard. The authors of [11] revealed that corporate average fuel economy (CAFE) regulation could help promote the market penetration of EV, especially if executed along with other incentives. The authors of [12] studied dual-credit policy in China and found that the Corporate Average Fuel Consumption rules alone may stimulate more plug-in electric vehicle (PEV) sales than the dual-credit policy; however, the dual-credit policy could stimulate more battery electric vehicles (BEVs) in the market compared to other policy scenarios. Additionally, more economic benefits could be achievable for fleet owners once the carbon tax is introduced [13].

Battery electric vehicles (BEVs) operating solely on electricity are not the only alternative for the electrification of passenger cars. Plug-in hybrid electric vehicles (PHEV) running on both gasoline and electricity, usually with a lower cruising range, have the potential to replace fuel used with electricity and thus lower the impact on the environment, without compromising the range of the vehicle [14]. Since PHEVs do not suffer from range limitation, they bring higher flexibility for drivers and can be well suited for diversified driving needs. For which type of EVs to become a major option on the private car market, the total economics of the EV type would presumably have to be favorable compared to the alternatives, since the currently dominant battery technology (Li-ion) is still relatively expensive. Earlier studies have commonly focused on total battery cost and some recent studies have discussed the marginal cost and its effect on cost-effective battery sizing. For example, [15] found the battery range has a small impact on the total cost of ownership (TCO) for PHEVs, while [16] concluded

that short-range PHEVs would reduce more gasoline consumption than PHEVs with a larger range. These different characteristics caused different market shares for EVs and PHEVs even in the same country. It will be interesting to study the effects of incentives on BEVs and PHEVs separately.

The trend of the relevant studies in recent five years is summarized in Table 2, adapted from a review by [13], selecting researches in field of Business Management and policy, as well as the field of Transportation and Environment science together. The adoption of electric vehicles is most frequently discussed in the USA and China, since the they have the largest EV markets. Studies in the USA are the most over the years, while studies based on other countries have been increasing, with China being the second, especially from 2017 onwards. The more prominent research design used in literature is a quantitative method compared to a qualitative method. Survey-based methodology is the most predominant method used for EV adoption, followed by simulation, optimization techniques, and secondary data analysis. Most cross-country studies used survey-based analysis and secondary data analysis, which indicates that heterogeneity, causality, and locational disparity are important indicators in the area [17]. Noticeably, the stated preference (SP) data of consumers may be subjective and are usually not be in accordance with reality [8]; thus, quantitative research using fact analysis may be preferred.


**Table 2.** Trend of the relevant studies in recent years <sup>1</sup> [13].

<sup>1</sup> Selecting only Scopus Q1 Journal ranking in 2017 in field of Business Management and policy, as well as field of Transportation and Environment science together.

Though plenty of researchers have done a considerable amount of work on EV-related policies, few papers have discussed the diminishing effect of subsidies for EVs using quantitative analysis on cross-country data. This scenario is also well known as the post subsidy era, referring to the stage when subsidies retreat and have less impact on consumers' purchasing decisions. This paper focuses on this recent subtle change of subsidies and fills the gap by using multiple linear regression and panel data on 13 countries from 2015 to 2018 to examine the impact of policies and infrastructures on electric vehicle market.

The rest of the paper is organized as follows. Section 2 gives the descriptive statistics of the data in 13 countries and introduces the methodology. Section 3 demonstrates the impact of the policy incentives and infrastructures on EV uptake, and explanations for the findings are given in this section. Section 4 draws conclusions and provides policy implications.
