Public Dollars or Private Decisions? A Policy Comparison for Electric Vehicle Infrastructure Growth

• In Event: Adoption of Electric Vehicles and Charging Infrastructure: Policy Design and Effectiveness

Abstract

Vehicle electrification has emerged as a key strategy to reduce emissions and improve public health. In response, many governments have introduced a range of policies to promote electric vehicle (EV) adoption. Recent economic literature suggests that subsidizing EV infrastructure deployment is more cost-effective in boosting EV sales than providing equivalent subsidies to EV buyers. However, there is limited research on which policy tools are most effective in deploying public EV charging stations.

This paper compares the policy efficacy of direct government funding (e.g., the Charging and Fueling Infrastructure Program) versus tax incentives that leave investment decisions to the private sector (e.g., Opportunity Zones) in influencing station growth and promoting distributive equity. This comparison reflects a foundational policy question: Should public investments be directly managed by the government or steered by market incentives?

To identify causal effects, I employ a staggered difference-in-difference methodology that leverages temporal and spatial variation in charging station growth. Both policies are place-based and target economically distressed communities. The Charging and Fueling Infrastructure Program has granted 3 rounds (Round 1A, 1B, and 2) to a total of 147 recipients and 1.78 billion in grant funding in 2023 and 2024. The Opportunity Zones have designated 8,764 census tracts since 2018, where tax credits are employed to encourage people to invest in these distressed areas. Importantly, while some eligible areas are finally selected as part of the program, many are not, creating a quasi-random counterfactual that strengthens the identification strategy.

Drawing on theories from public administration and political economy, this study evaluates how these contrasting policy approaches influence investment outcomes, with particular attention to spatial equity. Although Opportunity Zones were not originally designed to specifically support EV infrastructure, our empirical evidence suggests they may be more effective than federal grants in facilitating charging station deployment. The findings contribute to broader debates on the appropriate role of the state versus the market in advancing equitable and efficient infrastructure development.

Author

• Yifan Liu, Georgia Institute of Technology
  Presenting Author