Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Abstract: This paper investigates whether the world’s most mature electric vehicle (EV) market in Norway has overcome critical mass constraints and can achieve sustainable long-term equilibria without subsidies. We estimate a structural model that allows for multiple equilibria emerging from the interdependence between EV demand and charging station supply. We first estimate the resulting indirect network effects using an instrumental variable approach. Then, we simulate long-term market outcomes for each of the 422 Norwegian municipalities. We find that almost 20% of all municipalities faced critical mass constraints in the earliest stage of the market. Half of them are effectively trapped in a zero-adoption equilibrium. However, in the maturing market, all municipalities have passed critical mass. Overall, about 60% of the Norwegian population now lives in municipalities with a high-adoption equilibrium, even if subsidies were removed. This suggests that critical mass constraints do no longer justify the provision of subsidies.

Keywords: electric vehicles, network externalities, critical mass, subsidies

JEL-codes: H23; L62; Q48; Q58; R48 December 2021

Note: PDF Document

Full text files

wp317.pdf  

Download statistics

• Vienna University of Economics and Business, Department of Economics
• Home page for this series

Report problems with accessing this service to Sune Karlsson ().

RePEc:wiw:wiwwuw:wuwp317This page generated on 2024-10-31 04:36:12.