What are the effects of incentives on plug-in electric vehicle sales in Europe?

Plug-in electric vehicles (PEV), both as battery electric vehicles (BEV) and plug-in hybrid vehicles (PHEV) have noteworthy potential to reduce global and local emissions. Governments around the world have implemented monetary and non-monetary policies to accelerate PEV market diffusion. However, empirical estimates of their effectiveness are scarce. Here, we analyse data on PEV sales from 30 European countries from 2010-2016 with respect to direct subsidies, tax rebates, and other incentives. We apply panel data regression models and control for several other influencing factors such as income and fuel prices. We find income, diesel prices and both direct and indirect subsidies to positively influence PEV adoption. The aim of the present paper is to contribute to the discussion on policy-aided market evolution using empirical evidence about electric vehicles and alternative fuel vehicles in general.