A model of the economic ripple effect caused by the spread of clean energy vehicles

Popularity of clean energy vehicles (CEVs) are expected in order to reduce CO2 emissions to mitigate the global warming. However, the popularity provides not only environmental but also economic impacts. An EV requires a battery, but does not require the engine parts any more, which will bring a structural change of the auto parts industry. It is necessary to understand the characteristics of parts used in each CEV type and analyze the economic effects before considering the portfolio for introducing CEVs. In this study, CEV types which have a battery or a fuel cell based powertrain system are considered as well as gasoline, diesel or natural gas engines. This paper proposes an economic ripple effect model using the Input-Output Table. Simulation results show economic impacts in Japan in 2020 and 2030 for the target sales of CEVs assumed by the Ministry of the Environment in 2010. For example, simulation results indicates that production amount in Japan in 2030 is expected to decrease about 1.5 trillion yen compared to 2010.