Impact of policy incentives on electric vehicles development: a system dynamics-based evolutionary game theoretical analysis

  • Xiao Zhou
  • Rui ZhaoEmail author
  • Liang Cheng
  • Xuefeng Min
Original Paper


A system dynamics-based evolutionary game theoretical analysis is proposed to examine the impact of policy incentives, i.e., price subsidy and taxation preference on electric vehicles (EVs) industry development. Two case scenarios were used to distinguish policy performance by dividing it into a static and dynamic incentive. The result reflected that the game in implementation of the static incentive policy did not achieve stable equilibrium, indicating that such a policy is not effective for driving the development of the EVs industry. However, the game had stable equilibrium when dynamic incentive policy was implemented. The taxation preference had better performance in incentivizing EVs production than the direct subsidy. The study is expected to provide insight into policy making in the industrial transition toward low-carbon consumption. Limitations are given to indicate opportunities for further research.

Graphical abstract


Evolutionary game theoretical analysis System dynamics Electric vehicle industry Incentive policy 

List of symbols


The price of an electric vehicle


The price of a fossil fuel-based vehicle


The unit cost of an electric vehicle


The unit cost of a fossil fuel-based vehicle


Consumer’s attitude toward purchasing an electric vehicle


Consumer’s attitude toward purchasing a fossil fuel-based vehicle


The environmental performance of an electric vehicle


The environmental performance of a fossil fuel-based vehicle


The consumer’s payoffs from purchasing an electric vehicle


The consumer’s payoffs from purchasing a fossil fuel-based vehicle


The subsidy to enterprise that produces an electric vehicle


The subsidy to consumer who purchases an electric vehicle


The tax preference on the electric vehicle enterprise


The preferential tax rate


The enterprise’s payoffs from producing an electric vehicle


The enterprise’s payoffs from producing a fossil fuel-based vehicle


The market demand for electric vehicles


The market demand for fossil fuel-based vehicles


The consumer’s perceived benefits from purchasing an electric vehicle


The consumer’s perceived benefits from purchasing a fossil fuel-based vehicle



This study is sponsored by National Natural Science Foundation of China (No. 41571520), Sichuan Provincial Key Technology Support (No. 2019JDJQ0020), Sichuan Province Circular Economy Research Center Fund (No. XHJJ-1802), the Fundamental Research Funds for the Central Universities (No. 2682014RC04), Guangxi Key Laboratory of Spatial Information and Geomatics (No. 17-259-16-11).

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  • Xiao Zhou
    • 1
    • 3
    • 4
  • Rui Zhao
    • 2
    Email author
  • Liang Cheng
    • 1
    • 3
  • Xuefeng Min
    • 2
  1. 1.School of Geography and Ocean ScienceNanjing UniversityNanjingChina
  2. 2.Faculty of Geosciences and Environmental EngineeringSouthwest Jiaotong UniversityChengduChina
  3. 3.Jiangsu Provincial Key Laboratory of Geographic Information Science and TechnologyNanjing UniversityNanjingChina
  4. 4.Guangxi Key Laboratory of Spatial Information and GeomaticsGuilin University of TechnologyGuilinChina

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