Electric Vehicle Subsidies and Urban Air Pollution Disparities

Electric vehicles are subsidized at the federal, state, and local level. The design of these subsidies affects which consumers benefit most and where less-polluting vehicles are driven. We study these effects using a panel of new vehicle purchases at the zip-code level for seven US metro areas. We first describe patterns of neighborhood-level electric vehicle adoption and subsidy receipt. Adoption has been spatially uneven and concentrated in more advantaged and less polluted neighborhoods. We then pair a structural model of vehicle demand with a model of on-road emissions to study the effects of electric vehicle subsidy targeting for the Chicago metro area. A neighborhood income-targeted policy achieves lower overall reductions in carbon emissions but higher reductions in criteria pollution (NOx and PM2.5) in lower-income neighborhoods.