Enhancing electric vehicle market diffusion modeling: A German case study on environmental policy integration

In order to reduce national and global greenhouse gas (GHG) emissions, many countries worldwide have committed themselves to a more sustainable development of their transport sector. Promoting the use of electrical vehicles (EVs) rather than combustion engine cars is one political strategy to achieve a reduction in GHG emissions. To implement targeted and effective promotion measures governments can refer to market diffusion models for EVs. However, in our study we identify that in existing models the consideration of environmental measures is underrepresented. Hence, this paper addresses this gap in current market diffusion models for EVs by particular focusing on environmental effects as additional influencing factors of the market diffusion. Results are drawn for the German car market with a market diffusion simulation until 2050 applying the market diffusion model ALADIN considering the introduction of distinct CO2 tax trajectories. The results are analyzed based on scenarios, where (i) no CO2 tax, (ii) the current governmental plan for a CO2 tax, and (iii) a considerable high CO2 tax is applied. Additional insights when incrementally increasing the CO2 tax are provided. The scenario analysis shows that the market diffusion is highly dependent on the evolution of external factors. A CO2 tax considerably higher than the current governmental plan by 2030 (such as 150€/t, based on its monetary value by 2020) is required to have a meaningful impact on the market diffusion of EVs. Moreover, applying a considerable high CO2 tax leads to a slower growth of BEV and PHEV from 2040 onwards that is compensated by a growth in FCEV vehicles.