The Hidden Side of Electro-Mobility: Modelling Agents’ Financial Statements and Their Interactions with a European Focus

Abstract

While much attention has been given, to date, to subsidies and taxes, the literature on the topic is yet to address less visible aspects of electro-mobility. These include the interactions among players, including money exchanges, and balance sheet issues. Analysing these is needed, as it helps identify additional mechanisms that may affect electro-mobility. This paper reports a modelling exercise that applies the system dynamics method, with its focus on stock and flow variables. The resulting simulation model captures the financial statements of several macro agents. The results show that the objective of the study is met: the model remains ‘stock-flow consistent’, meaning that assets and equity and liabilities balance out. By attaining this, the model serves as a coherent framework that makes the “hidden” side of electro-mobility visible, for the first time, based on current state-of-the-art, with the implication that it facilitates the analysis of potential financial factors that may either jeopardise or be conducive to faster road electrification. We conclude that the incorporation of the financial statements of key electro-mobility agents and their interlinkages in a simulation model is both a feasible and desired property for policy-relevant models.