We can see that this remains an approximation
Posted: Mon Mar 17, 2025 4:27 am
Weighting the change in purchase prices by the weight of these purchases in overall expenditure for the current period certainly does not account for the instantaneous feelings of households that buy that year or those that will buy in another period. But this roughly reflects the average perception of all households in a steady state, for example, assuming that paying out €30,000 in a given year for only a fifth of households was equivalent to paying €6,000 per household each year for five years. At the time it is made, the disbursement of a substantial sum is more penalizing than a staggered payment. It is, moreover, the role of credit to allow such staggering, but at an additional cost, access to this credit not being equally open to everyone. This factor therefore still plays a role in underestimating the cost of switching to electric. This is precisely what is felt by households facing the immediate cost of investing in this type of vehicle, compared to ebay database purchasing a traditional combustion engine car.
However, the fact that maintenance or energy charging costs are lower in the case of electric vehicles can work in the other direction. Expenses related to vehicle use are included in the CPI, which reflects price changes for each of these items, but they are treated independently of the characteristics of the vehicles. For example, as the vehicle fleet becomes more electrified, the weight of electricity in the CPI will increase while that of gasoline will decrease, but these weighting changes will have no impact on the index as long as prices remain unchanged. However, what matters to households is not the cost per kWh or per liter of gasoline per se, but rather the cost of filling up, which is currently lower for electric vehicles. The growth in the share of electric vehicles will therefore imply an average decrease in this cost, although this will not be quantified by the CPI. We then ignore the savings generated for the user, which at least partially compensate for the savings from their initial investment or debt.
However, the fact that maintenance or energy charging costs are lower in the case of electric vehicles can work in the other direction. Expenses related to vehicle use are included in the CPI, which reflects price changes for each of these items, but they are treated independently of the characteristics of the vehicles. For example, as the vehicle fleet becomes more electrified, the weight of electricity in the CPI will increase while that of gasoline will decrease, but these weighting changes will have no impact on the index as long as prices remain unchanged. However, what matters to households is not the cost per kWh or per liter of gasoline per se, but rather the cost of filling up, which is currently lower for electric vehicles. The growth in the share of electric vehicles will therefore imply an average decrease in this cost, although this will not be quantified by the CPI. We then ignore the savings generated for the user, which at least partially compensate for the savings from their initial investment or debt.