Reda Cherif, Fuad Hasanov, Aditya Pande, 24 September 2017

The motor vehicle was very quick to replace horses in the early 20th century, and the advent of the electric car suggests that another profound shift in transportation and energy could be around the corner. This column projects how different rates of electric car adoption will effect oil demand and consumption over the next three decades. In a fast-adoption scenario, oil prices could converge to the level of current coal prices by the early 2040s. Even under a slow adoption scenario, oil could become obsolete before it is depleted.

Stephen Holland, Erin Mansur, Nicholas Muller, Andrew Yates, 09 August 2015

Many countries provide subsidies and tax incentives for the purchase of electric cars, since it’s believed electric vehicles have various benefits. This column argues that it is difficult to justify a large uniform subsidy based on environmental benefits alone. In some states in the US, the subsidy should indeed be large and positive, but in others it should be large and negative. This conclusion may need to be revisited in the future as the electricity grid becomes cleaner.


CEPR Policy Research