Abstract
In the competitive market environment, the growth of new energy vehicles (NEVs) faces many obstacles. Demand subsidy or production regulation-related policies are widely used to promote the development of NEVs. A comparative analysis of the effects of the two types of policies on the competitive vehicle market requires further study. To fill this gap, we investigate which type of policy is more preferable from the perspective of the social planner. In this paper, we construct a Stackelberg game with a welfare-maximizing social planner and two profit-maximizing manufacturers producing NEVs and fuel vehicles (FVs), respectively. Interestingly, although both types of policies can increase the quantity of NEVs, demand subsidy also promotes the growth of total vehicles at the same time; in contrast, production regulation reduces the total vehicles. Moreover, compared with the benchmark that no policy intervention, demand subsidy generally improves social welfare, while production regulation improves social welfare only with high consumer preference for NEVs. Nevertheless, production regulation always has a positive impact on the environment, whereas demand subsidy may have a positive impact only when the NEV is very environment friendly. The numerical results show that consumer environmental preferences and the regulation of environmental impact determine which type of policy dominates the other.
Highlights
New energy vehicles is defined as four-wheel vehicles using alternative fuel sources as the power source instead of conventional oil and gas, which includes hybrid vehicle (HV), battery electrical vehicle (BEV), fuel cell electric vehicle (FCEV), hydrogen engine vehicle (HEV), dimethyl ether vehicle (DEV), and other new energy vehicles
We investigate the following research questions: (i) What are the impacts of the two types of policies on the new energy vehicles (NEVs) adoption process, including price, quantity, and profit of manufacturers? (ii) What is the optimal decision of a social planner that helps achieve the adoption of NEVs and balanced objectives for maximizing social welfare and controls the environmental impact in the NEV market? To answer these questions, we construct a Stackelberg game with a welfare-maximizing policymaker and two profitmaximizing firms competing in the vehicle market
Our results provide several insights. Both types of policies can increase the quantity of NEVs, demand subsidy promotes the growth of total vehicles at the same time; in contrast, production regulation reduces the number of total vehicles
Summary
New energy vehicles is defined as four-wheel vehicles using alternative fuel sources as the power source instead of conventional oil and gas, which includes hybrid vehicle (HV), battery electrical vehicle (BEV), fuel cell electric vehicle (FCEV), hydrogen engine vehicle (HEV), dimethyl ether vehicle (DEV), and other new energy (e.g., high-efficiency energystorage devices) vehicles. Both types of policies can increase the quantity of NEVs, demand subsidy promotes the growth of total vehicles at the same time; in contrast, production regulation reduces the number of total vehicles. CVs refer to four-wheel vehicles using conventional oil and gas as the source of power They found that the dual-credit policy can improve the profit of NEV manufacturers and the total supply chain profit with the optimal credit price [22]. The impact of the dual-credit policy on manufacturers’ decisions has been studied, our paper focuses on the impact of production regulation from the perspective of the social planner with the goal of maximizing social welfare and controlling the environmental impact in the vehicle market. The social planner’s optimal decisions are considered
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