An empirical analysis of toll road exemption as a determinant for electric vehicle adoption : Norway as a case study 2010-2015

Abstract

Rising greenhouse gases (GHG) are posing a series of threat to the physical and economical livelihood of individuals living around the globe. The biggest source of world GHG emission is energy production and consumption activities, which makes the diffusion of energysustainable transport innovation to be very crucial. One example of such innovations, which has potential to reduce GHG emission, is electric vehicles (EV). However, despite its potential to address the global warming concern, EV adoption has been very limited without stimulation from external factors: such as strict emission regulation, financial incentives and rising fuel prices. In this regard, the Norwegian government has employed a wide range of incentive packages for promoting the purchase and use of electric vehicles including EV toll exemption. However, currently many people (including many politicians) would consider the market to being close to maturity and therefore expect the government incentives to be removed or updated. With this background, we assess whether the Norwegian EV toll road exemption is significant in promoting EV sales. To accomplish this, we mainly use monthly data on EV sales, toll cost and toll traffic and apply panel data regression method with city, year and month fixed effects. The time range of our analysis is 2010–2015. Our results show that EV toll exemption is insignificant in promoting EV sales in the three cities we consider: Oslo, Bergen and Stavanger. This is true whether you estimate users/drivers saving/cost from EV or non– EV perspectives. Furthermore, we find that charging stations, unemployment, income and vehicle kilometers are significant predictors of the sales of EV, a result which is confirmed by previous studies. But, in contrary to our suspicion, we did not find any significant rebound effect (that may result road congestion) due to the change in consumer driving behavior. Nonetheless, this result is also in agreement with previous survey studies on rebound effect. Overall, our research contributes to the existing literature since it analyzes EV toll exemption at a very detailed level, which was not attempted in previous research having similar goals.