New all-wheel-drive versions of the Tesla Model S car are lined up for test drives in Hawthorne, California

Reuters: Automakers race to double the driving range of affordable electric cars

Article published: Mar 24, 2015 – out of date: no longer suitable for your IB Economics commentary

IB Economics syllabus: Microeconomics (demand/supply, oligopoly, negative externality of production)

Demand for electric cars are very low relative to demand for conventional ones. This might change in the coming years as electronic vehicle manufacturers plan to produce cars with larger driving ranges and sell them at more affordable prices. This would be welcome by Govt’s who seek to promote a cut in pollution levels. Increasing the driving range is a form of non-price competition companies engage in to increase their market share.

Source of image: Lucy Nicholson/Reuters

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