Friday, December 2, 2022 | 12pm to 1pm
About this Event
Speakers: Prof. Jing Li, MIT
Host: Prof. Jinhua Zhao, MIT
The 2021 IIJA directs $7.5 billion toward electric vehicle charging infrastructure and prioritizes building fast charging stations at most 50 miles apart along U.S. highways. The efficiency of this policy crucially relies on the existence of frictions in the market provision of charging stations. If the market generates “holes” in charging networks, then the every-50-mile subsidy could be efficient. Otherwise, a uniform subsidy would be sufficient to internalize any environmental advantages of electric vehicles. We assemble a novel dataset about travel patterns, vehicle registrations, charging station entry locations and dates, and station-level charging demand. We investigate whether a new charging station entrant generates positive spillovers for incumbent charging stations in different distance bands, and in a second specification, along specific routes. We first investigate the impact of entry at different distances from incumbents. We next estimate the impact of incumbents when a route becomes connected with charging stations at specific distances. In a placebo test, we find no evidence of spillovers when the entrant and incumbent are on different charging standards, thus alleviating concerns about common shocks. The choice between the every-50-mile and uniform subsidies depends on whether charging network companies efficiently coordinate entry on their networks. We are investigating whether charging network companies help charging stations internalize their positive spillovers. For example, are entrants that fill holes more likely to share networks with incumbents on those routes?