When Is the Electric Vehicle Market Self-Sustaining? Evidence From Norway
Publication Year: 2022
Author(s): Koch N, Ritter N, Rohlf A, Scarazzato F
Abstract:
This study examines whether the world's most mature electric vehicle (EV) market in Norway has overcome critical mass constraints and can achieve sustainable long-term equilibria without subsidies. The authors estimate a structural model allowing multiple equilibria emerging from the interdependence between EV demand and charging station supply. The authors first evaluate the indirect network effects using an instrumental variable approach. Then, they simulate long-term market outcomes for the 422 Norwegian municipalities. The authors find that almost 20% of all municipalities faced critical mass constraints in the earliest stage of the market. Half of them are effectively trapped in a zero-adoption equilibrium. However, all municipalities have passed the critical mass in the maturing market. Overall, about 60% of the Norwegian population now lives in municipalities with a high-adoption equilibrium, even if subsidies were removed. This suggests that critical mass constraints no longer justify the provision of subsidies.
Source of Publication: Energy Economics
Vol/Issue: 110, 105991
DOI No.: 10.1016/j.eneco.2022.105991
Country: Norway
Publisher/Organisation: Elsevier B.V.
Rights: Elsevier B.V.
URL:
https://www.sciencedirect.com/science/article/pii/S0140988322001621
Theme: Vehicle Technology | Subtheme: Electric vehicles
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