Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing

Pascal Heid, Kevin Remmy and Mathias Reynaert

No 24-1589, TSE Working Papers from Toulouse School of Economics (TSE)

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 linking the German vehicle and electricity markets, emphasizing the timing of EV charging as generation costs and emissions vary intraday. A 10% EV stock raises wholesale electricity prices by about 2%, creating a sizable pecuniary externality. Timevarying tariffs shift charging to cheaper hours and spur adoption, only partially alleviating the aggregate price pressure. Time-varying tariffs sustain EV adoption when the electricity market faces higher demand or carbon costs.

Keywords: Electric vehicles; electricity markets; charging; complementary markets (search for similar items in EconPapers)
JEL-codes: L5 L6 L9 Q4 Q5 (search for similar items in EconPapers)
Date: 2024-10, Revised 2025-10
New Economics Papers: this item is included in nep-ene, nep-reg and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing (2025)
Working Paper: Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:129899

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