Policy mixes to promote the diffusion of battery electric vehicles with an agent-based model and experiments using the case of China

Abstract

Battery electric vehicles (BEVs) are effective tools for reducing carbon emissions. Incentive policies play an important role in promoting the development of emerging industries such as BEVs. The design of incentive policies to promote the diffusion of BEVs has been a critical focus in recent research. This study explores cost-effective financial incentive policies that consider regional heterogeneity. An agent-based model is developed that incorporates the individual heterogeneity of consumers and competition between BEVs and traditional internal combustion engine vehicles. The results indicate that consumer subsidies have a more direct promotional effect than manufacturer subsidies; however, this effect must be sustained by ongoing subsidies. Additionally, a policy mix is more efficient because an incentive policy can function better when combined with other policies. Furthermore, the inputs of subsidies are not “the more, the better,” and an appropriate mix of policies can result in better diffusion of BEVs. Finally, regional heterogeneities (e.g., potential market size and initial BEV ownership share) are important when designing incentive policies.