Effect of Consumers’ Green Preferences and Governmental Subsidy Policies on New Energy Vehicle Manufacturers: A Game-Theoretical Analysis

Abstract

Improving the efficiency of government policies can better promote the development of new energy vehicles, which has important strategic significance for realizing sustainable development. In this paper, the optimal decision model of new energy vehicles is established by considering both the green preference of consumers and the government policies. Based on the research of manufacturer's profit and social welfare, this paper analyzes the manufacturer's possible optimal pricing decision and the optimal government decision. Finally, through numerical analysis to demonstrate the impact of consumer's green preference on the manufacturer's profits and social welfare. It can be concluded that the new energy vehicle's price will increase with the increase of subsidy and the consumer's green preference. The government's optimal subsidy just depends on the level of consumer preference. In contrast, the new energy vehicle credit ratio is affected by many factors. When the new energy vehicle's credit income is large, the consumer's high green preference will greatly increase the demand for new energy vehicles, which does not require excessive government intervention. At the same time, the government can then reduce her own spending by lowering the new energy vehicle credit ratio. Otherwise, the government needs to intervene in the new energy vehicle market by increasing the new energy vehicle credit ratio.