Template-Type: ReDIF-Paper 1.0
Title: Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing
Author-Name: Pascal Heid
Author-Name: Kevin Remmy
Author-Email: remmy@uni-mannheim.de
Author-Name: Mathias Reynaert 
Classification-JEL: L5, L6, L9, Q4, Q5
Keywords: electric vehicles, electricity markets, charging, complementary markets

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
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.


Note: 
Length: 46
Creation-Date: 2024-12
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp615
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_615