Uncertain Electric Vehicle Incentives :Does It Affect Vehicle Choice? An exploratory study on how uncertainty impacts the sale of new electric vehicles, using media intensity as a measure of uncertainty

Abstract

This thesis explores whether uncertainty regarding electric vehicle incentives impacts electric vehicle sales. In the late 1990s, the first incentives for electric vehicles were implemented, and throughout the 2000s, more benefits were introduced. Since then, there have been several policy changes regarding the incentives, and there is an ongoing political and public debate about whether these incentives should be continued or not. To measure uncertainty, we constructed uncertainty indexes. The indexes are based on newspaper frequency, and they measure monthly uncertainty regarding various electric vehicle incentives. They are standardized and will take a value between 0 and 100. This uncertainty measurement was used in three case analyses to see if we could find any relationship between uncertainty and the sale of new electric vehicles. We conducted a time series analysis in an attempt to see how uncertainty regarding electric vehicle incentives, in general, has affected sales in the last decade. In this first attempt, we find no evidence that there is a relationship in the data. Furthermore, we conducted two specific case analyses with the difference-in-differences research method. In these analyses, we wanted to investigate how different levels of uncertainty regarding toll road fees and parking fees affected the sale. However, as in the first case, we do not get any statistically significant results, and we cannot conclude whether the uncertainty affects the sale. Despite the inconclusive results, the thesis provides a framework for decision-making and offers a thorough literature review of what influences consumers' vehicle choices. Furthermore, we use this insight to discuss possible explanations for our results both rational and psychological explanations. As far as we know, no previous empirical studies have been conducted on the relationship between uncertainty regarding incentives and sales. We hope this thesis will contribute with some insight and inspire to further research on the subject.