April 10, 2025, 10:00–10:45
Room A3
TSE internal seminars
Abstract
The transition to electric vehicles (EVs) shifts the complementary market for pas- senger transport from oil to electricity. We develop and estimate a joint equilibrium model of the German electricity and automobile markets, emphasizing the timing of EV charging, as electricity generation costs and pollution vary intraday. Our results show that under Germany’s current electricity pricing scheme, EVs create a significant pecuniary externality: electricity expenses rise by €0.66 for every €1 spent charging. Exposing charging to wholesale price variation eliminates the pecuniary externality, makes EVs greener, and increases adoption—a triple dividend.
Keywords
electric vehicles, electricity markets, charging, complementary markets;