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With great power (prices) comes great tail pipe emissions? A natural experiment of electricity prices and electric car adoption

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  • Mauritzen, Johannes

Abstract

An important question for the widely shared goal of electrifying passenger vehicles is how the price of electricity, which can vary greatly across countries and regions, affects buying behavior. I make use of a natural experiment in Norway in the period 2021–2022, when large electricity price differences emerged between northern and southern areas, to estimate the effect of electricity prices on the decision to purchase a pure battery-electric vehicle. Simple difference estimates along the border of the price zones as well as a difference-in-difference regression model suggest a significant but economically modest effect of a 2–4% reduction in the probability of purchasing an electric vehicle in the high-price zone conditional on the purchase of a new car.

Suggested Citation

  • Mauritzen, Johannes, 2025. "With great power (prices) comes great tail pipe emissions? A natural experiment of electricity prices and electric car adoption," Transportation Research Part A: Policy and Practice, Elsevier, vol. 192(C).
    • Handle: RePEc:eee:transa:v:192:y:2025:i:c:s096585642400404x
    DOI: 10.1016/j.tra.2024.104356
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