Network Externality and Subsidy Structure in Two-Sided Markets: Evidence from Electric Vehicle Incentives

Abstract

This paper uses new, large-scale vehicle registry data from Norway and a two-sided market framework to show nonneutrality of different subsidies and estimate their impact on electric vehicle adoption when network externalities are present. Estimates suggest a strong positive connection between electric vehicle purchases and both consumer price and charging station subsidies. Counterfactual analyses suggest that between 2010 and 2015, every dollar spent on station subsidies resulted in more than twice as many additional electric vehicle purchases than the same amount spent on price subsidies. However, this relation inverts with increased spending, as station subsidies’ impact tapers off faster. (JEL D12, D62, D85, H25, L62, Q54)

Environmental, Redistributive and Revenue Effects of Policies Promoting Fuel Efficient and Electric Vehicles

“…With an improved public charging infrastructure availability, households are more likely to adopt EVs, which is in line with previous research (i.e. (Springel 2021, Delacrétaz, Lanz, Van Dijk, et al 2020). However, the availability of charging infrastructure is not only a public but also a private issue.…”

“…Despite the generous government support through instruments and regulations, households are still reticent when it comes to the adoption of non fossil fuel driven cars. As such, it is important to analyze households' car choice decision between combustion engine and alternative fuel vehicles to be able to be er understand the factors that hinder or foster the di usion of these technologies in the population (Xing, Leard, & Li 2021, Springel 2021. Furthermore, policies should also be assessed with regards to their impact on environmental outcomes (Bento, Jacobsen, Kni el, & Van Benthem 2020, Holland, Mansur, Muller, & Yates 2016) as well as their potential redistributive implications, which requires an in depth analysis of the e ects of tax policy changes or subsidies across the income distribution (Sallee 2011, Durrmeyer 2021.…”

Supply Chain Coordination of Product and Service Bundling Based on Network Externalities

“…Network externalities have a significant impact on the pricing, market demand and total channel performance of bundled distribution channels [36,37]. There are studies on network externalities in various fields, such as electric vehicles [38], wireless devices [39], the gaming market [40] and government investment [41].…”

The Electric Vehicle Transition and the Economics of Banning Gasoline Vehicles

“…Nonetheless, it may still be possible to improve on BAU outcomes by implementing market-based policies such as a subsidy on the purchase of an electric vehicle or a ban on the production of gasoline vehicles. To analyze such policies, 25 $345 per vehicle multiplied by 110 million vehicles.…”

“…Another literature analyzes issues related to electric vehicle charging infrastructure such as the effect of charging standards and the relationship between charging infrastructure and electric vehicle policy (Springel 2016;Li et al 2017;Zhou and Li 2018;. We contribute to this literature by describing the relationship between infrastructure development and the substitutability of gasoline and electric vehicles and how this relationship affects the transition to electric vehicles.…”