Is it all about the money? The drivers behind the recent Indian electric vehicle success story

Abstract

We show that the recent Indian electric vehicle success story has been largely driven by the available amount of liquid deposits. While we observe that the relationship between liquid deposits and the share of electric vehicles in newly registered cars consists over time, we find that the effect grows with household wealth. Furthermore, we replicate the analysis for Brazil and show that our findings regarding the relationship between liquid deposits and the share of electric vehicles also hold for another emerging market, however, at lower magnitude. Based on this, we recommend policy makers to introduce further measures aiming at an improvement of household liquidity.