Abstract
The transition to electric vehicles (EVs) shifts the complementary market for passenger transport from oil to electricity. We develop and estimate a joint equilibrium model linking the German vehicle and electricity markets, emphasizing the timing of EV charging as generation costs and emissions vary intraday. A 10% EV stock raises wholesale electricity prices by about 2%, creating a sizable pecuniary externality. Timevarying tariffs shift charging to cheaper hours and spur adoption, only partially alleviating the aggregate price pressure. Time-varying tariffs sustain EV adoption when the electricity market faces higher demand or carbon costs.
Keywords
Electric vehicles; electricity markets; charging; complementary markets;
JEL codes
- L5: Regulation and Industrial Policy
- L6: Industry Studies: Manufacturing
- L9: Industry Studies: Transportation and Utilities
- Q4: Energy
- Q5: Environmental Economics
Reference
Pascal Heid, Kevin Remmy, and Mathias Reynaert, “Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing”, TSE Working Paper, n. 24-1589, October 2024, revised October 2025.
See also
Published in
TSE Working Paper, n. 24-1589, October 2024, revised October 2025