Assessing consumer preferences for luxury and economy electric vehicles in a post- tax credit market

April 2021
Michaela Nam

Since the introduction of the Federal Tax Credit (FTC) for electric vehicles, the US has been able to reduce the number of gasoline powered vehicles on the road by incentivizing users to purchase electric vehicles (EVs). However, as the FTC phases out for some EV models, it poses questions as to whether or not further incentives will be needed to encourage households to continue to purchase EVs at the same or greater rate. In this paper, I use qualitative statistical analysis to measure to what extent the sales of EVs are impacted by the FTC versus consumer behavior. Through this analysis, I find that the FTC has no significant impact on the sale of luxury EV models; while the FTC may encourage some users to adopt EVs, it is the brand reputation and image that strongly impacts the competition and rate in which models are sold. Using these observations, I provide potential solutions to help inform future EV policy that targets certain populations for EV adoption.