The rise of electric vehicles has unexpectedly made high-end gas cars more popular.
April 14, 2026
Original Paper
A Car for Recognition: The Heterogeneous Market Responses to the Emergence of Electric Vehicles
SSRN · 6560338
The Takeaway
As EVs became the "green" norm, they amplified the symbolic value of luxury internal combustion engines as status symbols of exclusive tradition. The presence of a sustainable alternative actually drove up sales for the expensive gas-guzzlers they were supposed to replace.
From the abstract
In automobile markets where consumers attach social recognition to car ownership, how does the introduction of a lower-cost alternative influence the market outcomes of traditional internal combustion engine vehicles (ICEVs)? Leveraging high-frequency sales data covering China's entire automobile market from 2018 to 2022, we examine heterogeneous market responses to the emergence of electric vehicles (EVs) across different price segments. Overall, the rise of EVs is associated with lower ICEV sa