Decarbonizing the European Automobile Fleet: Impacts of 1.5 °C-Compliant Climate Policies in Germany and Norway

Abstract

This paper focuses on assessing the impact of different policy measures, in particular different vehicle taxation schemes, on the composition of the fleet of newly registered cars in Norway and Germany. For this purpose, a fleet turnover model was extended by an economic model for predicting tax-induced market penetration of different powertrain technologies. The economic model determines a cost-optimal powertrain portfolio of the newly registered passenger cars based on financial and non-financial aspects. Model evaluation was performed for the case of Norway and Germany by means of reference scenarios that map the current taxation and non-financial preferences, such as range anxiety. The reference scenario in both cases overestimates the role of ZEVs, but is able to reflect the differences in regionalities (driven mainly by the taxation). Considering disutility costs leads to a shift away from ZEVs. Among the considered non-financial preferences, range anxiety has the strongest influence. The optimization framework is a valuable predictor of qualitative statements regarding the impact of tax measures on the fleet composition of newly registered passenger cars.

Keywords: decarbonization, alternative powertrain technologies, powertrain mix, consumer heterogeneity, non-financial preferences, techno-economic modeling, vehicle taxation

JEL Classification: R48, H30, O38