Impacts of market shocks and policy interventions on electric vehicle diffusion: An agent-based model

Electric vehicle (EV) diffusion is critical for sustainable goals, yet it faces various uncertainties. This study develops an agent-based model (ABM) simulating EV diffusion paths under market shocks and policy interventions with heterogeneous social networks. The model demonstrates an enhanced capability for depicting EV diffusion amid turbulent times. Results show that market shocks arising from public opinion crises induce the most severe impacts on EV diffusion, while price shocks and financial crises have moderate effects. Although EV market shows resilience to moderate shocks, its diffusion process can be interrupted by large-scale public opinion crises. Public information campaigns boost short-term demand but risk depleting long-term market potential. In contrast, infrastructure policies are slow to have effects, but work for long-term expansions. Heterogeneity analyses reveal that effective shock mitigation requires tailored policy interventions: public information campaigns favor regions with weak social networks, infrastructure policies work for high-income consumers, and the optimal interventions shift from plate-quota policies and public information campaigns to infrastructure policies as the EV market matures.