Advertisement

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
  • 77 Downloads

Abstract

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

Keywords

Evolutionary game theoretical analysis System dynamics Electric vehicle industry Incentive policy 

List of symbols

\(P_{g}\)

The price of an electric vehicle

\(P_{n}\)

The price of a fossil fuel-based vehicle

\(C_{g}\)

The unit cost of an electric vehicle

\(C_{n}\)

The unit cost of a fossil fuel-based vehicle

\(G_{g}\)

Consumer’s attitude toward purchasing an electric vehicle

\(G_{n}\)

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

\(\lambda_{g}\)

The environmental performance of an electric vehicle

\(\lambda_{n}\)

The environmental performance of a fossil fuel-based vehicle

\(U_{\text{c}}^{g}\)

The consumer’s payoffs from purchasing an electric vehicle

\(U_{\text{c}}^{n}\)

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

\(W_{\text{e}}\)

The subsidy to enterprise that produces an electric vehicle

\(W_{\text{c}}\)

The subsidy to consumer who purchases an electric vehicle

\(T_{\text{e}}\)

The tax preference on the electric vehicle enterprise

\(\gamma\)

The preferential tax rate

\(\varPi_{\text{e}}^{g}\)

The enterprise’s payoffs from producing an electric vehicle

\(\varPi_{\text{e}}^{c}\)

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

\(Q_{g}\)

The market demand for electric vehicles

\(Q_{n}\)

The market demand for fossil fuel-based vehicles

\(R_{g}\)

The consumer’s perceived benefits from purchasing an electric vehicle

\(R_{n}\)

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

Notes

Acknowledgements

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.

References

  1. Aslani A, Helo P, Naaranoja M (2014) Role of renewable energy policies in energy dependency in Finland: system dynamics approach. Appl Energy 113:758–765CrossRefGoogle Scholar
  2. Barari S, Agarwal G, ZhangWJ Mahanty B, Tiwari MK (2012) A decision framework for the analysis of green supply chain contracts: an evolutionary game approach. Expert Syst Appl 39(3):2965–2976CrossRefGoogle Scholar
  3. Bjerkan KY, Norbech TE, Nordtomme ME (2016) Incentives for promoting battery electric vehicle (BEV) adoption in Norway. Transp Res D Transp Environ 43:169–180CrossRefGoogle Scholar
  4. CAAM (China Association of Automobile Manufactures) (2018) The data of Chinese car sales in 2017. http://news.bitauto.com/hao/wenzhang/548812. Accessed 19 Sept 2018
  5. Chen K, Xiao T (2015) Outsourcing strategy and production disruption of supply chain with demand and capacity allocation uncertainties. Int J Prod Econ 170:243–257CrossRefGoogle Scholar
  6. Dinner IM, Van Heerde HJ, Neslin SA (2014) Driving online and offline sales: the cross-channel effects of traditional, online display, and paid search advertising. J Mark Res 51(5):527–545CrossRefGoogle Scholar
  7. Du JY, Ouyang DH (2017) Progress of Chinese electric vehicles industrialization in 2015: a review. Appl Energy 188:529–546CrossRefGoogle Scholar
  8. Du Z, Lin B, Guan C (2019) Development path of electric vehicles in China under environmental and energy security constraints. Resour Conserv Recy 143:17–26CrossRefGoogle Scholar
  9. Egbue O, Long S, Samaranayake VA (2017) Mass deployment of sustainable transportation: evaluation of factors that influence electric vehicle adoption. Clean Technol Environ Policy 19(7):1927–1939CrossRefGoogle Scholar
  10. Friedman D (1991) Evolutionary games in economics. Econometrica 59(3):637–666CrossRefGoogle Scholar
  11. Gallagher KS, Muehlegger E (2011) Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology. J Environ Econ Manag 61(1):1–15CrossRefGoogle Scholar
  12. Gao Y, Li Z, Wang F, Wang F, Tan RR, Bi J, Jia X (2018) A game theory approach for corporate environmental risk mitigation. Resour Conserv Recycl 130:240–247CrossRefGoogle Scholar
  13. Girardi P, Gargiulo A, Brambilla PC (2015) A comparative LCA of an electric vehicle and an internal combustion engine vehicle using the appropriate power mix: the Italian case study. Int J Life Cycle Assess 20(8):1127–1142CrossRefGoogle Scholar
  14. Guo D, He Y, Wu Y, Xu Q (2016) Analysis of supply chain under different subsidy policies of the government. Sustainability 8(12):1290CrossRefGoogle Scholar
  15. Hafezalkotob A, Alavi A, Makui A (2016) Government financial intervention in green and regular supply chains: multi-level game theory approach. Int J Manag Sci Eng 11(3):167–177Google Scholar
  16. Hao H, Wang M, Zhou Y, Wang HW, Ouyang MG (2015) Levelized costs of conventional and battery electric vehicles in china: Beijing experiences. Mitig Adapt Strateg Glob 20(7):1229–1246CrossRefGoogle Scholar
  17. Hao H, Cheng X, Liu Z, Zhao F (2017) Electric vehicles for greenhouse gas reduction in China: a cost-effectiveness analysis. Transp Res D Transp Environ 56:68–84CrossRefGoogle Scholar
  18. Hirte G, Tscharaktschiew S (2013) The optimal subsidy on electric vehicles in German metropolitan areas: a spatial general equilibrium analysis. Energy Econ 40:515–528CrossRefGoogle Scholar
  19. Hu GP, Wang LZ, Chen YH, Bidanda B (2014) An oligopoly model to analyze the market and social welfare for green manufacturing industry. J Clean Prod 85:94–103CrossRefGoogle Scholar
  20. Ji P, Ma X, Li G (2015) Developing green purchasing relationships for the manufacturing industry: an evolutionary game theory perspective. Int J Prod Econ 166:155–162CrossRefGoogle Scholar
  21. Jiang ZZ, He N, Qin X, Ip WH, Wu CH, Yung KL (2018a) Evolutionary game analysis and regulatory strategies for online group-buying based on system dynamics. Enterp Inf Syst 12(6):695–713CrossRefGoogle Scholar
  22. Jiang H, Zhao S, Yuan Y, Zhang L, Duan L, Zhang W (2018b) The coupling relationship between standard development and technology advancement: a game theoretical perspective. Technol Forecast Soc 135:169–177CrossRefGoogle Scholar
  23. Junquera B, Moreno B, Alvarez R (2016) Analyzing consumer attitudes towards electric vehicle purchasing intentions in Spain: technological limitations and vehicle confidence. Technol Forecast Soc 109:6–14CrossRefGoogle Scholar
  24. Kim MK, Oh J, Park JH, Joo C (2018) Perceived value and adoption intention for electric vehicles in Korea: moderating effects of environmental traits and government supports. Energy 159:799–809CrossRefGoogle Scholar
  25. Lieven T (2015) Policy measures to promote electric mobility—a global perspective. Transp Res A Policy 82:78–93CrossRefGoogle Scholar
  26. Liu QL, Li XC, Hassall M (2015) Evolutionary game analysis and stability control scenarios of coal mine safety inspection system in China based on system dynamics. Saf Sci 80:13–22CrossRefGoogle Scholar
  27. Liu C, Huang W, Yang C (2017) The evolutionary dynamics of China’s electric vehicle industry—taxes vs subsidies. Comput Ind Eng 113:103–122CrossRefGoogle Scholar
  28. Mahmoudi R, Rasti-Barzoki M (2018) Sustainable supply chains under government intervention with a real-world case study: an evolutionary game theoretic approach. Comput Ind Eng 116:130–143CrossRefGoogle Scholar
  29. Ministry of Finance of the People’s Republic of China (2018) Notice on the adjustment and improvement of the subsidy policy for the promotion of new energy vehicles. http://jjs.mof.gov.cn/zhengwuxinxi/zhengcefagui/201802/t20180213_2815574.html. Accessed 10 May 2018
  30. MOST (Ministry of Science and Technology of the People’s Republic of China) (2016) Notice on revising and publishing the measures for the identification of high-tech enterprises. http://most.gov.cn/tztg/201602/t20160204_123994.html. Accessed 15 Jan 2019
  31. Noori M, Tatari O (2016) Development of an agent-based model for regional market penetration projections of electric vehicles in the United States. Energy 96:215–230CrossRefGoogle Scholar
  32. Oltra V, Jean MS (2009) Sectoral systems of environmental innovation: an application to the French automotive industry. Technol Forecast Soc 76(4):567–583CrossRefGoogle Scholar
  33. Plötz P, Schneider U, Globisch J, Dütschke E (2014) Who will buy electric vehicles? Identifying early adopters in Germany. Transp Res A Policy 67:96–109CrossRefGoogle Scholar
  34. Rezvani Z, Jansson J, Bodin J (2015) Advances in consumer electric vehicle adoption research: a review and research agenda. Transp Res D Transp Environ 34:122–136CrossRefGoogle Scholar
  35. Safarzyńska K, van den Bergh JC (2018) A higher rebound effect under bounded rationality: interactions between car mobility and electricity generation. Energy Econ 74:179–196CrossRefGoogle Scholar
  36. Sheu JB, Chen YMJ (2012) Impact of government financial intervention on competition among green supply chains. Int J Prod Econ 138(1):201–213CrossRefGoogle Scholar
  37. Smith JM, Price GR (1973) The logic of animal conflict. Nature 246(11):5Google Scholar
  38. Tan QL, Wang MN, Deng YM, Yang HP, Rao R, Zhang XP (2014) The cultivation of electric vehicles market in China: dilemma and solution. Sustainability 6(8):5493–5511CrossRefGoogle Scholar
  39. Teixeira ACR, da Silva DL, Neto LDVBM, Diniz ASAC, Sodré JR (2015) A review on electric vehicles and their interaction with smart grids: the case of Brazil. Clean Technol Environ Policy 17(4):841–857CrossRefGoogle Scholar
  40. Teng J, Xu C, Wang W, Wu X (2018) A system dynamics-based decision-making tool and strategy optimization simulation of green building development in China. Clean Technol Environ Policy 20(6):1259–1270CrossRefGoogle Scholar
  41. Tian YH, Govindan K, Zhu QH (2014) A system dynamics model based on evolutionary game theory for green supply chain management diffusion among Chinese manufacturers. J Clean Prod 80:96–105CrossRefGoogle Scholar
  42. Wang N, Pan H, Zheng W (2017) Assessment of the incentives on electric vehicle promotion in China. Transp Res A Policy 101:177–189CrossRefGoogle Scholar
  43. Wang Y, Huscroft JR, Hazen BT, Zhang M (2018) Green information, green certification and consumer perceptions of remanufactured automobile parts. Resour Conserv Recycl 128:187–196CrossRefGoogle Scholar
  44. Weinstein MI (1986) Lyapunov stability of ground-states of nonlinear dispersive evolution-equations. Commun Pur Appl Math 39(1):51–67CrossRefGoogle Scholar
  45. Xu L, Su J (2016) From government to market and from producer to consumer: transition of policy mix towards clean mobility in China. Energy Policy 96:328–340CrossRefGoogle Scholar
  46. Yang DY, Xiao TJ (2017) Pricing and green level decisions of a green supply chain with governmental interventions under fuzzy uncertainties. J Clean Prod 149:1174–1187CrossRefGoogle Scholar
  47. Yang J, Dong J, Hu L (2018) Design government incentive schemes for promoting electric taxis in China. Energy Policy 115:1–11CrossRefGoogle Scholar
  48. Zhang X (2014) Reference-dependent electric vehicle production strategy considering subsidies and consumer trade-offs. Energy Policy 67:422–430CrossRefGoogle Scholar
  49. Zhang X, Bai X (2017) Incentive policies from 2006 to 2016 and new energy vehicle adoption in 2010–2020 in China. Renew Sustain Energy Rev 70:24–43CrossRefGoogle Scholar
  50. Zhang Y, Han Q (2017) Development of electric vehicles for China’s power generation portfolio: a regional economic and environmental analysis. J Clean Prod 162:71–85CrossRefGoogle Scholar
  51. Zhao R, Neighbour G, Han J, McGuire M, Deutz P (2012) Using game theory to describe strategy selection for environmental risk and carbon emissions reduction in the green supply chain. J Loss Prev Process 25(6):927–936CrossRefGoogle Scholar
  52. Zhao R, Neighbour G, McGuire M, Deutz P (2013) A software based simulation for cleaner production: a game between manufacturers and government. J Loss Prev Process 26(1):59–67CrossRefGoogle Scholar
  53. Zhao R, Peng DP, Li Y (2015) An interaction between government and manufacturer in implementation of cleaner production: a multi-stage game theoretical analysis. Int J Environ Res 9(3):1069–1078Google Scholar
  54. Zhao R, Zhou X, Han JJ, Liu CL (2016) For the sustainable performance of the carbon reduction labeling policies under an evolutionary game simulation. Technol Forecast Soc 112:262–274CrossRefGoogle Scholar
  55. Zhao R, Han JJ, Zhong SZ, Huang Y (2018) Interaction between enterprises and consumers in a market of carbon-labeled products: a game theoretical analysis. Environ Sci Pollut Res 25:1394–1404CrossRefGoogle Scholar
  56. Zheng X, Lin H, Liu Z, Li D, Llopis-Albert C, Zeng S (2018) Manufacturing decisions and government subsidies for electric vehicles in China: a maximal social welfare perspective. Sustainability 10(3):672CrossRefGoogle Scholar
  57. Zhou KZ, Brown JR, Dev CS (2009) Market orientation, competitive advantage, and performance: a demand-based perspective. J Bus Res 62(11):1063–1070CrossRefGoogle Scholar

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

Personalised recommendations