Zero Emission Vehicles In Vermont

Creating Incentives for Market Growth
PRS Briefs
PRS Policy Brief 1617-05
Friday, March 10, 2017

In 2013, Governor Peter Shumlin of Vermont — along with the governors of California, Connecticut, Maryland, Massachusetts, New York, Oregon, and Rhode Island — signed a Zero Emission Vehicle (ZEV) Memorandum of Understanding (MOU). Per the agreement, the coalition of states committed to undertaking necessary actions to ensure that at least 3.3 million ZEVs are on the road across the seven states by 2025. Yet due to technological and infrastructural limitations, along with persistently low consumer awareness and confidence, all of the signatory states continue to encounter challenging barriers to ZEV adoption. Indeed, a fundamental point suggested by current literature is that “existing complementary policies are important but insufficient to ensure California and the Section 177 states meet the 2025 targets.”1 This report assesses potential programs to incentivize the purchase of ZEVs in Vermont. We consider ways that Vermont could increase both financial and non-financial incentives, while also expanding consumer awareness and outreach efforts. Given that funding is a primary concern, we evaluate similar incentive and outreach programs adopted by other states with a particular attention to cost and compatibility. Such cost-effective strategies include both tried-and-tested methods (i.e., point-of-sale rebates, tax credits, ride-and-drive events) and creative solutions (i.e., raffles, broad advertisement campaign, waiving vehicle registration fees, and preferential parking). To catalyze growth in a nascent market, Vermont must be aggressive in its initiatives and be willing to undertake up-front spending, at least until ZEVs become relatively mainstreamed, which, according to the literature, is the point at which registered ZEVs represents approximately 15 percent of total passenger automobile sales.2 This will prove to be essential if Vermont is to achieve its ZEV goals and, of course, its broader commitments to reducing dependency on fossil fuels and addressing climate change.