The conseil d’analyse économique (French Council of Economic Analysis, an entity working for the French prime minister’s office) has published Professor Sylvain Chassang‘s recent policy paper, “The Overlooked Bargains of EV Adoption Policy.” The paper shows that taking the used car market into account radically changes how we should prioritize emission-reduction efforts associated with individual car use.

For example, if a person switches to an electric vehicle (EV), their existing internal combustion engine (ICE) car will get sold on the used car market. As a result, it will continue emitting greenhouse gases (GHGs). While it may help push an even older car to the scrap heap, such effects are small: the used car market is large, liquid, and capable of absorbing significant additional supply. The paper estimates that even net of such effects, a used ICE car will continue emitting at least 60% of its emissions.

Chassang finds two practical applications from this data: 

1. Drivers with a below-average annual mileage (less than 8,000 miles in the US context, though this changes state by state) have a bigger impact on emissions by keeping their current ICE car, than by switching to an EV.
2. Drivers with an average annual mileage (between 12,000 and 15,000 miles in the US) would reduce their emissions by switching to an EV, but the timing is not essential. Whether they change now or change in 3 years does not make a significant difference.

Regarding EV subsidies, the paper shows that most existing EV subsidies target a car’s first owner, typically during the first year. This makes new cars attractive at the expense of used car and results in accelerated depreciation of recent used EVs. The paper estimates that a 4,000 USD subsidy allocated to an EV in its first years induces a mechanical depreciation of  recent used EVs of 10%. This depreciation ultimately increases the cost of EV ownership, so that in equilibrium, the first owner of an EV only benefits from roughly 20% of the intended subsidy, the remainder indirectly benefiting second buyers through diminished price. This accelerated depreciation gives a terrible image of EVs as unreliable. Instead, it would be more effective to subsidize the leasing cost of EVs, old or new. This has the same equilibrium effects on first and second owners, but would not result in accelerated depreciation in the used EV market.

Chassang proposes an individual action plan in three key steps, “Keep, Cut, Commit:”

• If your are a low annual mileage owner of an ICE car, keep it.
• Cut your fuel usage by 10% today. Concretely, this could mean using your car a little bit less often (pay-per-mile car insurance makes that more attractive), or even just learning to drive more economically by accelerating and braking more gently.
  • Because it’s something everyone can do right now, reducing fuel usage by 10% has an impact on temperatures by 2050 comparable to an accelerated switch of new car sales from ICE cars to EVs, especially in locations where the carbon intensity of electricity is high.
• Commit that your next car will be electrified, ideally by subscribing to a government sponsored savings program. This will provide important signals of future demand needed for infrastructure operators to coordinate key investments.

Chassang began working on this research work a year and a half ago as part of his mandate with the French Council of Economic Advisors and in partnership with the French public investment bank (BPI France) and consumer defense association (UFC Que Choisir).

“The reception has been very good,” Chassang said. “The paper has been shared with all relevant government bodies, including the prime minister’s office, the finance ministry, the industry ministry, and the president’s office. I have had a second meeting with both the industry ministry and the president’s office. In addition, I’ve been in talks with car manufacturers and electric infrastructure operators, as well as several consumer defense associations regarding what aspects of the proposal they could pick up on their own and push forward.”

The Economics Department looks forward to sharing further developments and impacts from Chassang’s research as they occur. Read recent media coverage of the paper in Le Monde, l’Opinion, and Le Nouvel OBS.

About Sylvain Chassang

Affiliated with the Griswold Center for Economic Policy Studies, Sylvain Chassang is a Professor of Economics at Princeton University. He is an applied is microeconomist whose research interests are in game theory, industrial organization, and development. Chassang’s recent publications include: “Valuing the Time of the Self-Employed,” with Daniel Agness, Travis Baseler, Pascaline Dupas, and Erik Snowberg (Review of Economic Studies, 2025); “Using Divide-and-Conquer to Improve Tax Collection,” with Lucia Del Carpio and Samuel Kapon (Quarterly Journal of Economics, 2024); “Regulating Collusion,” with Juan Ortner (Annual Review of Economics, 2023); “Robust Screens for Non-Competitive Bidding in Procurement Auctions,” with Kei Kawai, Jun Nakabayashi, and Juan Ortner (Econometrica, 2022); and “Data-Driven Incentive Alignment in Capitation Schemes,” with Mark Braverman (Journal of Public Economics, 2022).

Chassang’s current research examines monitoring harassment in organizations with Laura Boudreau, Ada Gonzales-Torres, and Rachel Heath; and work on improved preference measurement through hypothetical choice experiments, especially in the context of anticipating future demand for EVs. His work on the importance of the used car market in understanding the impact of public policy in transport emissions (outlined in this article) is ongoing as he presents these findings to government agencies to affect policy.