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Abstract We evaluate German purchase subsidies for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) using data on new vehicle registrations in Germany during 2015-2022. We account for confounding time trends and interacting EU-level CO₂ standards using neighboring countries as a control group. We find that 40% of BEV and 25% of PHEV registrations were subsidy-induced. The program had strong distributional effects, with greater uptake in wealthier and greener counties. We estimate implied abatement costs of 870 euro per ton of CO₂ for BEVs and 2, 470 euro for PHEVs, suggesting that policy makers should re-balance support schemes away from PHEVs.
Haan et al. (Tue,) studied this question.