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Charged and Almost Ready—What Is Holding Back the Resale Market for Battery Electric Vehicles?

Author

Listed:
  • Scott A. Brave
  • Thomas H. Klier
  • Leslie McGranahan

Abstract

We utilize vehicle registration microdata for all new and used vehicles registered in the U.S. for model years 2010-2022 to study the market for used battery electric vehicles (BEVs). From these records, we establish two stylized facts: 1) BEVs enter the used market at the slowest rate compared to any other powertrain technology, and 2) BEVs are driven significantly less than vehicles featuring other powertrain technologies. We connect these facts through a statistical model of used vehicle registration counts and find that there are significant behavioral differences between BEV and other new vehicle owners in how utilization (both on average and at the margin) leads to these vehicles being resold. By way of a counterfactual exercise that equalizes average vehicle miles traveled, we then illustrate that these behavioral differences can explain from 10-30 percent of the differential rates of transition from new to used vehicle status we observe between BEVs and internal combustion engine (ICE) vehicles.

Suggested Citation

  • Scott A. Brave & Thomas H. Klier & Leslie McGranahan, 2023. "Charged and Almost Ready—What Is Holding Back the Resale Market for Battery Electric Vehicles?," Working Paper Series WP 2023-35, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:96973
    DOI: 10.21033/wp-2023-35
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    References listed on IDEAS

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    1. Kenneth Gillingham & Fedor Iskhakov & Anders Munk-Nielsen & John Rust & Bertel Schjerning, 2022. "Equilibrium Trade in Automobiles," Journal of Political Economy, University of Chicago Press, vol. 130(10), pages 2534-2593.
    2. Mark R. Jacobsen & Arthur A. van Benthem, 2015. "Vehicle Scrappage and Gasoline Policy," American Economic Review, American Economic Association, vol. 105(3), pages 1312-1338, March.
    3. Sergio Correia & Paulo Guimarães & Tom Zylkin, 2020. "Fast Poisson estimation with high-dimensional fixed effects," Stata Journal, StataCorp LP, vol. 20(1), pages 95-115, March.
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    More about this item

    Keywords

    electric vehicles; depth of market;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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