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An innovative subsidy model for promoting the sharing of Electric Vehicles in China: A pricing decisions analysis

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  • Fan, Jing-Li
  • Wang, Jia-Xing
  • Zhang, Xian

Abstract

China’s existing subsidy policy for Electric Vehicles (EVs) is putting pressure on government finances, and the effect of EV promotion has not been ideal. Sharing EVs can reduce energy demand and greenhouse gas emissions while meeting people’s demand for a vehicle. This paper proposes a new government subsidy sharing scheme that is based on vehicle mileage. Using Beijing as the case study, the pricing and profits of vehicle sharing companies (VSCs) are analyzed. Three main conclusions are obtained. First, VSCs have trouble meeting market demand and consequently also have trouble making a profit. Second, allocating subsidies between VSC and consumers in a certain proportion will better motivate residents to use shared EVs. As the sharing factor increases, the demand for shared EVs in each market segment will increase by at least 16.2%, and the maximum profit of VSCs under the new subsidy mode can be increased by 3.4%. Third, the optimal pricing of a VSC is about 1.8 RMB/km under the traditional subsidy mode, while with the new subsidy mode, the optimal pricing of a VSC will increase along with the subsidy sharing factor.

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  • Fan, Jing-Li & Wang, Jia-Xing & Zhang, Xian, 2020. "An innovative subsidy model for promoting the sharing of Electric Vehicles in China: A pricing decisions analysis," Energy, Elsevier, vol. 201(C).
    • Handle: RePEc:eee:energy:v:201:y:2020:i:c:s0360544220306642
    DOI: 10.1016/j.energy.2020.117557
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