Assessing the effectiveness of California's “Replace Your Ride”

We analyze the effectiveness of California's “Replace Your Ride” policy, a pilot program that gives subsidies to lower income households in the greater Los Angeles area to retire older vehicles and replace them with newer, cleaner vehicles. Using a differences in differences strategy to compare changes in new vehicle purchase probabilities between income eligible and ineligible households before and after the implementation of the program, we find that in 2015, upwards of 44% of plug-in electric vehicle and 78% of hybrid vehicle purchases under the program were additional. •We assess the effectiveness of California's “Replace Your Ride” (RYR) program.•Additional sales of low emission vehicles resulting from the RYR policy are high.•Sales of plug-in electric vehicles and hybrids increased ∼50% and ∼75%.•These additional sales would not have been made without the RYR subsidy.•RYR is found to be 1.5x more cost-effective than California's former CVRP program.