Markets in Action: Supply and Demand for Electric Vehicles

This resource provides a playlist of short videos exploring supply and demand factors affecting the fast-changing market for electric vehicles.

Video 1: Market overview – trends in electric vehicle sales and production

Video 2: Factors influencing market demand

Market demand factors include:

• Real household (disposable) incomes
• Industrial/corporate demand for new electric vehicles
• Relative prices of substitutes e.g. mass transport
• Relative prices of complements e.g. charging stations, costs of servicing new vehicles
• Government subsidies paid direct to consumers
• Impact of regulations e.g. UK government ban on new diesel / petrol cars post 2040
• Cost of credit e.g. interest rates on electric car finance deals
• Changing tastes and preferences including environmental concerns among consumers when making decisions

Video 3: Factors influencing market supply

Market supply factors include:

• Costs of components used in manufacturing e.g. batteries, computer hardware and software
• Productivity in e-vehicle manufacturing
• Economies of scale in e-vehicle manufacturing
• Number of producers operating in the market
• Impact on government subsidies paid to producers
• Impact of government taxes levied on producers
• Effects of changing production technologies / innovation
• Costs of meeting regulatory compliance / environmental standards in the industry

Video 4: Comprehension exercise - changing market prices