Climate, Technology and Value: Insights from the First Decade with Mass-Consumption of Electric Vehicles

Abstract

Adoption of low-carbon technology is key to mitigating climate change. A possible unwanted consequence of fast technological progress is that products get outdated before their technical lifetime is over. We investigate whether the market value of electric vehicles, characterized by rapid technological progress, declines faster over their lifetime than gasoline vehicles, which represent a mature technology. We use novel data from Norway, the market with the highest market shares for electric vehicles in the world. The data are from the largest web platform for secondhand vehicles over the period 2011–2021. Prices of electric vehicles decline faster than gasoline vehicles. This seems to be driven by the electric vehicles with below median driving range. We hypothesize that the large price drop is mainly due to the fast technological improvement of electric vehicles.