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Electric vehicle demand and electricity prices shocks

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Abstract

This study estimates the causal impact of the recent years’ high electricity prices on electric vehicle (EV) adoption. Utilizing Swedish registry data and leveraging regional discontinuities in electricity prices, I demonstrate that higher electricity prices reduce EV demand, but also the demand for combustion-engine vehicles. Additionally, the response to electricity prices varies across different types of EVs and socio-economic groups. Based on these findings, I explore a counterfactual policy that reduces electricity prices for EV buyers, and show that under plausible assumptions, this policy is less cost-effective in boosting EV demand compared to subsidies for EV purchases or charging infrastructure.

Suggested Citation

  • Vesterberg, Mattias, 2025. "Electric vehicle demand and electricity prices shocks," Umeå Economic Studies 1032, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:1032
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    More about this item

    Keywords

    Electrification; Transportation; Regression discontinuity;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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