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Title: Preferences and Investments in Electric Vehicle Fast Charging: A Study of Tesla's Supercharging Network
Citation Type: Miscellaneous
Publication Year: 2022
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Abstract: Promoting electric vehicles (EVs) has been a major goal of the US government to combat climate change, but the role that the EV fast charging network plays is relatively understudied. In this paper, I investigate Tesla's investment in its network of fast charging stations (called Supercharging stations) as a tool to increase the attractiveness of its EVs and how that incentive interacts with EV purchase subsidies. I develop a structural model that consists of three components: consumer demand for new vehicles, pricing competition among automak-ers, and Tesla's investment in its Supercharging network. The demand model incorporates consumer heterogeneity reflecting fast charging accessibility in their home counties and along their travel routes. Tesla's investment decision features various locations in communities and along highway corridors, and is rationalized by the profitability of its vehicle sales. I follow the revealed preference approach used by Holmes (2011) and Houde et al. (forthcoming) to set-identify investment cost parameters. The results show that consumers value access to in-community and along-highway fast charging almost equally, and the presence of either is equivalent to a 4 percent drop in vehicle prices. The counterfactual analysis shows that EV purchase subsidies have an expansionary effect on the Supercharging network. The effect is larger for in-community locations and depends on the demographics of the location. This paper also shows that ignoring the effect of the Supercharging network on demand or Tesla's adjustments to its network underestimates the positive effect of EV purchase subsidies on consumer welfare and emission reductions.
Url: https://xinyu-zhao-econ.github.io/assets/pdf/JMP.pdf
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Authors: Zhao, Xinyu
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Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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