Benefits and costs of electric vehicles for the public finances: An integrated valuation model based on input-output analysis, with application to France

Application of the method to France reveals first that the impact of a vehicle on the public finances is substantial: manufacture contributes approximately the purchase price excluding VAT, and usage adds an amount of the same order of magnitude. The vast majority of the revenues (approximately 70%) arise from the social contributions associated with production, including the opportunity value of employment; VAT accounts for almost 20%, tax on production around 5%, and energy taxes 9% for a CV vehicle or 1% for an EV. Then, four cases for substitution of EV to CV are set up and assessed, depending on the places either domestic or foreign in which the vehicle is manufactured and used, respectively. In the base case, where the vehicle is both manufactured and used inside the country, substituting an EV to a CV would be financially neutral for public finances - at least before any purchase incentive bonus. The export case, where an EV is substituted to a CV in domestic production but then exported and hence used outside the country, yields an additional revenue of about €8000 to the domestic public finances (without bonus); the import case has an opposite effect. Lastly, the twofold substitution of an imported EV to a domestically manufactured CV for domestic use would entail a loss of about €20,000 (without bonus). Therefore, for France the purchase incentive bonus can be justified mainly by the stakes of energy independence and domestic industry at the national scale or of environmental quality at the urban scale.