Analysis on the market evolution of new energy vehicle based on population competition model

Abstract

New energy vehicles (NEVs) development has recently become China's national strategy. For NEVs, the scientific prediction of market scale is the guarantee to formulate the effective policy planning. Considering the competition and substitution phenomenon between traditional fuel vehicles (TFVs) and NEVs, we propose a system dynamics (SD) model to investigate and predict the market evolution of NEVs and TFVs in China based on the competitive Lotka-Volterra (LV) model. Furthermore, the effect mechanism of key model parameters is evaluated by sensitivity analysis. Finally, the potential environmental impacts of NEVs in China are analyzed based on the above simulation results. It shows that NEVs will continue to grow rapidly in the coming decades and will dominate in Chinese vehicle market around 2050. Government subsidies and other consumption stimulus factors are the main driving force for NEVs development in its early stages, however, along with the policy stimulus and policy influence gradually weakening, growth in later stages will rely on convenience factors and cost advantages brought by technological progress and infrastructure improvements. It is noteworthy that the national strategic planning target in 2020 can hardly be achieved under China’s current policy system and market conditions. The results of sensitivity analysis reveal that the policy support and maximum market capacity show different decisive influences on the development trend of the entire automotive market. In addition, if China's relevant energy and environmental planning can be effectively implemented, the rapid expansion of NEVs will significantly reduce the environmental impact of vehicles.