By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.
This paper develops a structural model of endogenous product attribute
choice in the presence of indirect network effects to study
electric vehicle (EV) subsidies. Using data on the German EV
market, I find that a support scheme almost doubled EV sales but
substantially affected EVs’ price and driving range. These adjustments
create a trade-off between optimizing different policy objectives
when designing subsidies. Large purchase subsidies maximize
EV sales, whereas large charging station subsidies maximize consumer
and total surplus. The results suggest that maximizing EV
sales can lead to unintended consequences in the form of price and
range adjustments.
