Drivers of global electric vehicle (EVs) adoption : a comprehensive analysis of policy, infrastructure, and socio-economic factors

Abstract

This study aims to analyse the relationship between policy, infrastructure and socio-economic factors specifically measured by environmental awareness, fuel prices and per capita income on electric vehicle adoption from 2018-2023 in two country grouping classifications namely countries with the most electric vehicle adoption and countries with emerging electric vehicle adoption. This country grouping is based on the International Energy Agency (IEA) reference. This study uses a panel data regression model, fixed effects for measurement (model 1), namely the classification of all countries combined, the Random Effects model for (model 2), namely the country with the most electric vehicle adoption and the Common Effects Model for (model3), namely the countries with emerging electric vehicle adoption. This research concentrates on (Models 1 & 2). The results show that policies and infrastructure variable have a significant and positive effect on electric vehicle adoption in both country classification models, namely in country classification (models 2 & 3). These results illustrate the important role of the state as a key institutional actor driving the electric transportation transformation. and it shows that charging infrastructure is a significant driver of EV adoption even in the early days of the market. The socio-economic factors of environmental awareness and income per capita do not have a positive significant effect on the countries classified in (model 2), but the fuel price variable has a positive significant effect in this model, indicating that the countries with the most EV adoption means that the penetration rate of electric vehicles is determined more by existing infrastructure and strong policy support, rather than socio-economic factors. In addition, higher fuel prices may encourage consumers to purchase EV as a more affordable operating option. Meanwhile, there is no significant positive effect of the three socioeconomic variables on EV adoption in the country classification of (model 3), which suggests that socio-economic factors do not prove to be important as EV adoption in these countries is currently constrained by other structural factors, Individual decisions are heavily influenced by factors such as lack of charging infrastructure and lack of incentives or regulations. Therefore, despite increased environmental sensitivity, the growth of EV remains limited. The study implies that policies and infrastructure play a very important role in the adoption of EV in the countries studied, with supportive regulations, fiscal incentives, and provision of adequate charging infrastructure shown to accelerate the penetration of EV adoption.