This article was published in TSE science magazine, TSE Mag. It is part of the Spring 2024 issue, dedicated to “Climate Revolution”. Discover the full PDF here and email us for a printed copy or your feedback on the mag, there.
Electric vehicles (EVs) can substantially reduce local and global pollution. Unfortunately, few will buy an EV without a network of charging stations, and a network has little value without EVs. To solve this coordination problem, Kevin Remmy’s empirical framework examines how to design effective subsidies. Building on his research at TSE, he highlights the need for policymakers to understand how car makers will strategically adjust prices and driving range in response to subsidies and indirect network effects. These reactions can lead to strong price and range distortions that shape consumer choices about whether to buy an EV, which in turn shape policy outcomes. In particular, focusing on maximizing EV sales may come at the expense of range improvements and the development of charging networks.
FURTHER READING
The chicken-and-egg problem of electric cars | LSE Business Review
