The effect of US environmental and trade policies on the global electric vehicle market

• In Event: Innovation, competition, and tariffs: insights from EV value chains across batteries, vehicles, and charging infrastructure

Abstract

Multinational automakers must make decisions on where to manufacture and sell each model that they produce. In a global setting, these decisions depend on country-specific demand, production costs, and trade costs. We build a two-stage structural model of local consumer vehicle demand and manufacturing costs, and firm decision making on the location of vehicle manufacturing and sales. We use this model to investigate the effect of US electric vehicle subsidies and trade policies on short-term (holding factory locations fixed) and long-term changes in the volume of automobiles manufactured, electric vehicle costs and sales, and consumer and manufacturer welfare across countries.

Author

• Luke Michael Heeney, Massachusetts Institute of Technology
  Presenting Author