The early success of the Multi-State ZEV action Plan: beyond the Californian edge

Abstract

The decarbonisation path in the US passenger vehicle sector is falling short of the pressing climate needs. While policy programs to encourage alternative fuel vehicle (AFV) adoption are spreading fast, the quantification of those initiative’s effectiveness is highly limited in the literature. This paper endeavours to fill this gap by providing the first empirical estimation of the causal impact on AFV sales attributable to the Multi-State ZEV Action Plan, launched in 2014. To the best of our knowledge, this is the first paper that isolates the market impact of the ZEV mandate once expanded beyond Californian borders. We find the ZEV program to enhance AFV sales 60% above the nationwide average for the studied period (2011-2018) in the most conservative specification. Results are robust to dropping outlier states like California. We argue that this early success lies in the comprehensiveness of the supply-side policies, not in the generosity of demand side purchase incentives.