Exploring impact of federal tax credit on decision to lease or purchase a PEV

Using a sample of approximately 7,000 California PEV drivers recruited
from California Clean Vehicle Rebate Program applicants, two logistic
regression models are specified to analyze responses by PEV lessees and
purchasers to the question of what they would do in the absence of the
federal tax credit. Possible responses include: Purchase/lease the same
PEV, switch to a different PEV, switch to a conventional or hybrid
(non-plug in) vehicle, or do not acquire a vehicle at all. Several key
insights are found; higher discounts from the tax credit increase the
probability of lessees indicating they would not lease a PEV at all. For
purchasers, in addition to not purchasing any vehicle at all, the
probability of purchasing a conventional vehicle, or another PEV also
increase. These findings could have implications for California’s ability
to reach its ZEV milestones and are important to consider due to recent
changes to the US federal tax credit. Our findings indicate that many PEV
adopters would likely not adopt their PEV without the tax credit,
potentially more so for leased compared to purchased vehicles. There are
also unique results for lessees related to the impact of home ownership;
renters are more likely than homeowners to lease a conventional vehicle
than a PEV in the absence of the tax credit. This finding contributes to
the literature which finds homeowners to be more likely to adopt a PEV
than renters, emphasizing the importance of access to at-home charging for
PEV adoption. These results show how incentives may be more influential
for adoption decisions in the PEV lease market is, and the factors which
are associated with consumers’ PEV adoption behavior in the absence of the
federal tax credit.