This paper will present the results of a cost-benefit analysis performed to determine the public benefits of the $7500 federal tax credit for purchasing an electric vehicle. A cost benefit ratio including air pollution, carbon dioxide emissions, and oil dependence as components was created and applied to every county in the continental United States. The results suggest that the current tax credit is too high since it does not create $7500 worth of public benefits using the benefits included in the analysis. Benefits vary regionally due to sources of electricity generation and existing air pollution levels with counties in the northeast and on the west coast generally seeing higher benefits from EV use. The largest component of the benefits is from reducing oil dependence while it was also found that EV use in some areas could actually increase air pollution and CO2 emissions. The cost-benefit analysis indicates that the government should consider lowering the tax credit and that air pollution and CO2 emissions from the electric power industry need to be addressed before widespread EV use occurs in much of the United States.
Library of Congress Subject Headings
Electric vehicles--Government policy--United States--Cost effectiveness; Tax credits--United States--Cost effectiveness
Department, Program, or Center
Department of Science Technology and Society/Public Policy (CLA)
Fuqua, William, "Cost benefit analysis of the federal tax credit for purchasing an electric vehicle" (2012). Thesis. Rochester Institute of Technology. Accessed from
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