Electric Cars: Ready for Prime Time?

Should electric cars receive subsidies – or “primes” – in order to help countries reduce oil dependence, greenhouse gas emissions and air pollution … and if so, when? This Policy Brief highlights evidence on the costs to consumers and society of purchasing battery electric cars instead of equivalent fossil-fuelled cars and assesses the justification for purchase subsidies. It is based on detailed cost comparison for vehicles currently on sale in the French market and discusses the impact of the €5 000 “prime” for electric cars. Our analysis finds that:

• Electric passenger cars currently cost €4k to €5k more to their owners than an equivalent fossil fuel car over the vehicle’s lifetime… 
• … but because of greater travel distances, an electric delivery van costs €4k less to owners over its lifetime than a similar fossil-fuel van. 
• Societal costs for electric cars and vans range from €7k to €12k more than fossil fuelled equivalents. 
• The costs of reducing CO2 emissions by promoting electric cars, even with low carbon electricity, remain high. 
• In those cases where electric cars already compare favourably to fossil-fuelled vehicles, subsidies may be superfluous.