1. Dynamic subsidies for synergistic development of charging infrastructure and electric vehicle adoption
- Author
-
Qi Luo, Zhenfei Zhan, Romesh Saigal, Yunlei Yin, and Pengyu Chen
- Subjects
History ,Government ,business.product_category ,Polymers and Plastics ,Sequential game ,Geography, Planning and Development ,Evasion (network security) ,Subsidy ,Transportation ,Environmental economics ,Industrial and Manufacturing Engineering ,Policy enforcement ,Electric vehicle ,Business ,Business and International Management ,Market share - Abstract
The governmental subsidy is an important instrument for catalyzing the early adoption of Electric Vehicles (EVs)}. A sustainable subsidy policy must balance between promoting EVs and expanding the charging infrastructure. This paper proposes a dynamic game approach to accelerate the adoption of EV technology. The government observes two correlated processes - the penetration of the EV market and the expansion of the charging infrastructure. It finds an optimal strategy that maximizes the cumulative social benefit in the face of uncertainty. A case study of China's EV industry finds that \blue{the established EV subsidy policies are inadequate to support EVs' growth over the next decades}. In contrast, the optimal subsidies will achieve \blue{the target EV market share and ensure the accessibility to charging infrastructure by 2030}. This non-myopic strategy can prioritize the infrastructure expansion, eliminate policy enforcement's monitoring costs, prevent compensation evasion, and help achieve long-term targets by making proactive regulatory policies.
- Published
- 2022