Abstract
Since the China State Grid opened the market for infrastructure construction of electric charging stations and allowed Tesla, Potevio, BAIC BJEV and other enterprises to provide their own charging stations and other infrastructure construction, the development of electric vehicles has been greatly affected. How to maintain a sustainable governance in the opened electric vehicle charging and upgraded facilities market is an important policy issues. This paper presents a monopolistic competition model for the differentiated products market and addresses several issues related to Cournot equilibrium to illustrate why the expected free market actually operates in a monopolistic competition market structure. The analytic solution of the model shows that whether the extent of firm entry is insufficient, excessive or optimum is determined by consumers’ time preference, level of production differentiation and features of cost structure, including fixed cost and marginal cost. The sensitivity analysis has been performed among the above factors and tracked some other factors which would determine the effect of the new policy issues. The main policy suggestion is that the government should optimize entry regulations and lay down the criterion of charging interface standards for charging stations to avoid the electric vehicle charging and upgraded facilities marketization process of a one-size-fits-all solution and form a monopolistic competition market.
Highlights
The State Grid has received much praise since it announced the opening of the market of infrastructure construction of electric charging stations and gave social capital the right to build their own charging electric stations on 27 May 2014
In May 2014, the State Grid Corporation of China opened the electric vehicle charging and upgraded facilities market; the parties actively participating in the charging infrastructure construction construction industry formed two ways of building public electrical vehicle charging stations
Plugging pie(ne) and qie(ne) into firms’ profit, we can solve for the equilibrium number of electric vehicle (EV) firms ne, in the long run
Summary
The State Grid has received much praise since it announced the opening of the market of infrastructure construction of electric charging stations and gave social capital the right to build their own charging electric stations on 27 May 2014. This announcement was good news for many electric vehicle (EV) producers, such as Tesla, who can build and arrange their network of electric charging stations offering charging services for their electric vehicles, contributing to their market share of electric vehicles. IInn ddiiffffeerreennttiiaatteedd pprroodduucctt iinndduussttrriieess,, aann aaddddiittiioonnaall aattttrraaccttiivvee ffeeaattuurree ooff mmoorree ffiirrmmss iiss aann iinnccrreeaassee iinn pprroodduucctt vvaarriieettyy,, wwhhiicchh ddiirreeccttllyy iinnccrreeaasseess ccoonnssuummeerr ssuurrpplluuss
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