Dynamic subsidies for synergistic development of charging infrastructure and electric vehicle adoption

Qi Luo; Yunlei Yin; Pengyu Chen; Zhenfei Zhan; Romesh Saigal

doi:10.1016/j.tranpol.2022.09.028

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Dynamic subsidies for synergistic development of charging infrastructure and electric vehicle adoption

Journal article

Peer reviewed

Dynamic subsidies for synergistic development of charging infrastructure and electric vehicle adoption

Qi Luo, Yunlei Yin, Pengyu Chen, Zhenfei Zhan and Romesh Saigal

Transport policy, Vol.129, pp.117-136

12/2022

DOI: 10.1016/j.tranpol.2022.09.028

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Abstract

The governmental subsidy is an important instrument for catalyzing the 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 for computing the optimal subsidies, taking into consideration the cross-side network effect between EV adoption and charging infrastructure expansion. The government's objective is to expedite the adoption of EV technology, maintain sustainable EV-to-CS ratios, and maximize cumulative social benefit in the face of uncertainty. The case study of China's EV industry indicates that the existing EV subsidy program, known as the Dual-Credit Policy (DCP), will not be sufficient to support EV growth by 2035 due to inadequate infrastructure investment. In contrast, the optimal subsidies will achieve the target EV market penetration rate and ensure the accessibility to charging infrastructure by 2035. 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.

Charging infrastructure

Electric vehicle adoption

Policy incentive

Principal-multiagent system

Technology diffusion

Details

Title: Subtitle: Dynamic subsidies for synergistic development of charging infrastructure and electric vehicle adoption
Creators: Qi Luo - Clemson University
Yunlei Yin - Chongqing University
Pengyu Chen - Chongqing University
Zhenfei Zhan - Chongqing Jiaotong University
Romesh Saigal - University of Michigan–Ann Arbor
Resource Type: Journal article
Publication Details: Transport policy, Vol.129, pp.117-136
Publisher: Elsevier Ltd
DOI: 10.1016/j.tranpol.2022.09.028
ISSN: 0967-070X
eISSN: 1879-310X
Language: English
Date published: 12/2022
Academic Unit: Business Analytics
Record Identifier: 9984696718402771

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