Evaluating government policies promoting electric vehicles, considering battery technology, energy saving, and charging infrastructure development: A game theoretic approach

Abstract

he cost and fear of running out of battery (range anxiety) are major obstacles to the widespread adoption of electric cars (EVs). Hence, the government's political actions have the potential to significantly mitigate the adverse impact of these issues on the adoption of electric vehicles. This research examines the supply chain of a battery electric vehicle (BEV), which includes the government, a BEV manufacturer, a charging infrastructure business (CI firm), and consumers. Next, we construct a game theory model employing Stackelberg's method to evaluate three distinct types of intervention policies: consumer-side intervention policy (V), production-side intervention policy (T), and charging service-side intervention policy (C). This analysis is conducted within the framework of two sustainable objectives: economic-environmental goal (EB) and socio-economic goal (SW). Policy V involves the government providing financial assistance or imposing fees on Battery Electric Vehicles (BEVs) customers. Policy T provides manufacturers with research and development subsidies to enhance battery technology, while policy (C) offers subsidies to CI firm to establish charging infrastructure. The findings provided significant insights for policymakers and decision-makers in several scenarios aligned with the government's multifaceted objectives. The findings suggest that T and C policies benefit the government, BEV maker, and CI firm most when the objective is SW. Additionally, these policies lead to the largest market demand. Suppose the government's objective is to promote electric vehicles (EVs). In that case, policy C yields the greatest advantage for the recipients when there is a strong emphasis on battery technology and the availability of charging infrastructure. Under policies T and C, the government incurs the largest subsidy cost while pursuing the SW target. Similarly, when pursuing the EB objective, the government incurs the highest subsidy cost under the V policy. In conclusion, this research demonstrates that all three intervention policies benefit the demand for battery electric vehicles (BEVs). Therefore, it is recommended that the government implement suitable policies based on the prevailing market conditions to promote the growth of sustainable transportation.