Electrifying the transportation sector is widely recognized as a critical strategy for reducing carbon emissions. Countries like the United States and China have set ambitious goals for electric vehicle (EV) adoption, targeting 50% and 40% of total vehicle sales to be EVs by 2030, respectively. To achieve these objectives, governments have implemented various industrial policies, such as purchase incentives, to stimulate the growth of EV and EV battery industries. Research by Hyuk-soo Kwon of Harris Public Policy and his collaborators Yucheng Wang (University of Sydney), Panle Barwick (University of Wisconsin), Shanjun Li (Cornell University), and Nahim Zahur (Queen’s University) reveals that these policies not only drive EV adoption but also spur innovation by automakers.
The researchers assembled a global database spanning 2008 to 2023, documenting industrial policies for the automotive industry alongside patent applications for gasoline and EV technologies. Their findings highlight a significant global pivot toward EV-targeted policies after the 2008 financial crisis, with the share of EV-specific industrial policies rising from almost none in 2008 to about 50% by 2022. Concurrently, automakers began shifting their innovation efforts, as evidenced by a threefold increase in EV-related inventions compared to those for gasoline vehicles over the past decade. A significant increase in EV-targeted policies over five years led to a 4% rise in EV patent applications.