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A Game-Theory Analysis of Electric Vehicle Adoption in Beijing under License Plate Control Policy

Author

Listed:
  • Lijing Zhu

    (China University of Petroleum)

  • Jingzhou Wang

    (China University of Petroleum)

  • Arash Farnoosh

    (IFPEN - IFP Energies nouvelles, IFP School)

  • Xunzhang Pan

    (China University of Petroleum)

Abstract

To reduce traffic congestion and protect the environment, license plate control (LPC) policy has been implemented in Beijing since 2011. In 2019, 100,000 vehicle license plates were distributed, including 60,000 for electric vehicle (EV) and 40,000 for gasoline vehicle (GV). However, whether the current license plate allocation is optimal from a social welfare maximization perspective remains unclear. This paper proposes a two-level Stackelberg game which portrays the interaction between vehicle applicants and the government to quantify the optimal EV license plates under the LPC policy in Beijing. The equilibrium number of EV license plates derived from the Stackelberg model is 58,800, which could increase the social welfare by 0.38%. Sensitivity analysis is conducted to illustrate the impact of important influential factors — total license plate quota, vehicle rental fee, and energy price — on EV adoption. The LPC policy under COVID-19 is also studied through a scenario analysis. If the government additionally increases the total quota by 20,000, 24% could be allocated to GV and 76% to EV. One third reduction of the current vehicle rental fee could increase EV license plates by 10.5%. Interms of energy prices, when gasoline price is low, reducing electricity price could contribute to EV adoption significantly, while that effect tapers off as the gasoline price rises.

Suggested Citation

  • Lijing Zhu & Jingzhou Wang & Arash Farnoosh & Xunzhang Pan, 2021. "A Game-Theory Analysis of Electric Vehicle Adoption in Beijing under License Plate Control Policy," Working Papers hal-03500766, HAL.
    • Handle: RePEc:hal:wpaper:hal-03500766
    Note: View the original document on HAL open archive server: https://ifp.hal.science/hal-03500766
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    Keywords

    Electric vehicle; License plate control (LPC) policy; Stackelberg game theory; License plate quota;
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