Optimal innovation strategies of automakers with market competition under the dual-credit policy

Abstract

Implementing the dual-credit policy has brought about a milestone shift in China’s automotive market, which plays a significant role in automakers’ innovation. This study constructs an evolutionary game model based on the Hotelling theory to explore the impact of the dual-credit policy on the innovation strategies of conventional automakers (CAs) and new energy automakers (NAs). Further, a multi-agent simulation model is used to analyze the intrinsic mechanism of the endogenous and exogenous elements of the policy on innovation-decision behaviors. The results show that the dual-credit policy can effectively promote CAs’ technology innovation and electrification, but the incentive effect shows a high degree of heterogeneity across the different scales of NAs. Notably, the competitive market environment significantly affects the incentive effect of the dual-credit policy on NAs’ technology innovation. The revision of the dual-credit policy will mainly affect the innovation dynamics of NAs: the effect of the new energy vehicle (NEV) accounting multiplier is positive, whereas the effect of proportion requirements for NEVs production and standard model credit is negative. The findings further show the threshold effect of the credit transaction price on automakers’ innovation incentives, with the price threshold being higher for NAs than for CAs.