The Market for Electric Vehicles: Indirect Network Effects and Policy Design
Year: 2017
Type: article
Abstract: The market for plug-in electric vehicles (EVs) exhibits indirect network effects due to the interdependence between EV adoption and charging station investment. Through a stylized model, we demonstrate that indirect network effects on both sides of the market lead to feedback loops that could alter the diffusion process of the new technology. Based on quarterly EV sales and charging station deployment in 353 metro areas from 2011 to 2013, our empirical analysis finds indirect network effects on both sides of the market, with those on the EV demand side being stronger. The federal income tax credit of up to $7,500 for EV buyers contributed to about 40% of EV sales during 2011–13, with feedback loops explaining 40% of that increase. A policy of equal-sized spending but subsidizing charging station deployment could have been more than twice as effective in promoting EV adoption.
DOI: 10.1086/689702
Authors: Shanjun Li, Lang Tong, Jianwei Xing, Yiyi Zhou
Language: English
Subfield: Electrical and Electronic Engineering
Field: Engineering
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W3125469821