Séminaire externe du LAET

Abstract: Plug-in Hybrid Electric Vehicles (PHEVs) have become a cornerstone of the European automotive market, driven by favorable tax treatments and their strategic role in helping manufacturers meet fleet-wide CO2 targets. However, their environmental efficacy relies heavily on the « Utility Factor » (UF)—the regulatory assumption regarding the distance driven in electric mode. Empirical evidence has revealed a substantial « emission gap, » where official test procedures underestimate real-world discharges by 300–500% due to optimistic UF curves.

This paper investigates the welfare consequences of correcting information asymmetries in the carbon content of PHEVs, through the evaluation of Commission Regulation (EU) 2023/443, which reforms the Utility Factor computation to align with real-world CO2 monitoring data. Using a structural model of supply and demand that we estimate on the German car market, we simulate alternative market equilibria under this tightened regulatory regimes. We analyze how correcting the « regulatory subsidy » for PHEVs alters welfare, through manufacturer pricing strategies, consumer surplus, and substitution between different vehicle technologies. Our findings provide critical insight into the effectiveness of correcting information asymmetries in environmental regulation and whether the 2023 reform is sufficient to close the gap between compliance and reality.