Pricing strategies of domestic and imported electric vehicle manufacturers and the design of government subsidy and tariff policies

Abstract

This paper investigates the optimal pricing strategies of domestic/imported electric vehicle manufacturer and the government’s optimal decisions by developing the game-theoretic models. The results show that the technology spillover caused by introducing IEVs into domestic markets can affect the profits of electric vehicle manufacturers and the government’s decisions on subsidies and tariffs. In addition, implementing the subsidy and tariff policies can help to improve the profit of the domestic electric vehicle manufacturer and the social welfare. Moreover, when the degree of technology spillover is relatively large, implementing the subsidy and tariff policies can also help to improve the consumer surplus.