A coordination analysis of stakeholder interests on the new subsidy policy of hydrogen fuel cell vehicles in China: From the perspective of the evolutionary game theory

Abstract

For breakthrough the Hydrogen Fuel Cell vehicle (HFCV) technical strangleholds, China plans to implement a new support policy to HFCV industry named Replace Subsidy with Award (RSA), which aims to replace production subsidy into upgrading key technology subsidy. In this research, considering the limited rationality of Central Government (CG), Local Government (LG), and enterprises, we examine China's RSA policy using the tripartite Evolutionary Game Theory (EGT). The theoretical analysis suggests that there are five scenarios of evolutionary stable strategies (ESS) of stockholders and among three of them, enterprises are willing to implement stable tech-upgrading in reality. Through this study, we also found the divergence of CG and LG under the RSA system. The simulation result reveals that: (1) under some given conditions, enterprises will reach ESS with an active response to RSA, whatever the initial value of all stockholders; (2) the supervision from CG and the competitive benefits for local industry is critical to reaching the goal for tech-upgrading, with increased default penalties and incitation can promote LG to implement RSA effectively because the conflict of interest decreases in various stockholders; (3) a better business environment and less protectionist markets are also conducive to achieving the ESS of RSA. According to the results, we further prospect the undergoing RSA policy and give some recommendations to the HFCV industry in China for sustainable development.