Technology Adoption and Critical Mass: The Case of the U.S. Electric Vehicle Market

82 Pages Posted: 31 Oct 2015 Last revised: 31 Dec 2017

See all articles by Yiyi Zhou

Yiyi Zhou

Stony Brook University

Shanjun Li

Cornell University - School of Applied Economics and Management

Multiple version iconThere are 3 versions of this paper

Date Written: December 30, 2017

Abstract

The interdependence between electric vehicle (EV) adoption and charging station deployment could lead to multiple equilibria. Under certain market conditions, the issue of critical mass arises and a market failing to overcome this hurdle would revert to a no-adoption outcome. Using panel data of EV sales and charging stations across U.S. Metropolitan Statistical Areas (MSAs), we find that more than half of the MSAs face critical mass constraints and that a subsidy policy targeting these critical-mass constrained MSAs could be much more effective in promoting EV adoption than the current uniform policy.

Keywords: technology adoption, indirect network effects, critical mass, electric vehicles

JEL Classification: Q4, Q5, R4

Suggested Citation

Zhou, Yiyi and Li, Shanjun, Technology Adoption and Critical Mass: The Case of the U.S. Electric Vehicle Market (December 30, 2017). NET Institute Working Paper No. 15-10. Available at SSRN: https://ssrn.com/abstract=2683606 or http://dx.doi.org/10.2139/ssrn.2683606

Yiyi Zhou (Contact Author)

Stony Brook University ( email )

Shanjun Li

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States

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