Role of government subsidies in the new energy vehicle charging infrastructure industry: a three-party game perspective

Abstract

With the new round of scientific and technological revolution and industrial transformation, China has posited the direction of “new infrastructure” in 2020. As one of the seven major industries of the “new infrastructure”, the charging infrastructure (CI) industry not only supports the upgrade of the new energy vehicle industry but also provides developing platforms for emerging industries, such as wireless charging, energy storage, smart microgrid, and new energy consumption. Therefore, the government’s supporting role is crucial for the CI industry. To effectively explore the effectiveness of government’s subsidy policy in the CI industry and promote its healthy development, we employed a game model and discussed the government's evolution process of different game strategies between CI and battery-swapping station (BSS) operators in this study. First, China's government subsidies for the electric vehicle (EV) industry were classified into CIs and BSSs. The subsidies obtained by the CI operators were operating subsidies, whereas those obtained by BSSs were investment subsidies. Second, a game model was constructed, involving the government, operators, and users. The model used backward induction to seek the refined Nash equilibrium solution for CIs and BSS operators. The Nash equilibrium solution indicated that the optimal investment amount and BSS quantity of the operator were positively correlated with the government subsidy intensity. When the profitability of the operators increased and the amount of the subsidies increased, consumers’ willingness to use EVs increased and the policy effects were closely related to the benefits of government management. The decisions made by either the users or the operators were inversely related to the operators’ management efficiency. Besides, the subsidy policy was affected by the government management. Therefore, in the implementation stage of the government’s future subsidy policies, the government needs to innovate and improve management effectiveness. The government could use subsidy policies as a driving force for developing the CI industry to build a comprehensive ecosystem of the industry, which is also the next key point for the government to promote the development of the CI industry in the future.