German free rider supplement data

Battery electric vehicles (BEV) are considered the central instrument in road transport decarbonization. To accelerate diffusion, many governments have introduced purchasing subsidies, yet the extent to which they induce additional adoption rather than subsidizing purchases that would have occurred regardless, remains a key policy question. This study develops a forecast-based framework to quantify free ridership in Germany’s Umweltbonus program, which distributed approximately 1.4 million BEV subsidies, totaling €6.9 billion between 2016 and 2023. The counterfactual is constructed by fitting Gompertz diffusion functions to BEV sales share data from two non-subsidy periods (2010 to mid-2016 and 2024 to 2025), which bracket the subsidy regime. Deviations between observed registrations and the forecast baseline during the subsidy period are interpreted as surplus sales, indicating that the implied free rider share amounts to approximately one-third of all subsidized purchases, which is lower than most prior estimates in the literature. An average subsidy of €4,938 per vehicle is associated with a forecast-based surplus of about 119%, translating into an implied cost of €7,485 per additional BEV and approximately €439 per ton of CO₂ avoided over a ten-year vehicle lifetime. Higher subsidy amounts are associated with both larger surplus sales and a higher free rider share relative to the forecast baseline, highlighting a fundamental trade-off in incentive design.