IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v26y2024i5d10.1007_s10668-023-03305-x.html
   My bibliography  Save this article

Effects of diversified subsidies on the decisions of infrastructure operators considering charging infrastructure construction level and price sensitivity

Author

Listed:
  • Liangui Peng

    (East China University of Science and Technology)

  • Ying Li

    (East China University of Science and Technology)

Abstract

Electric vehicles are one of the key measures to decarbonize the transportation industry. However, insufficient charging infrastructure hinders the process of vehicle electrification. The government implements investment and operation subsidies for charging infrastructure to overcome this problem. The different effects of different subsidy models on the decisions of infrastructure operators have not been fully discussed in the literature. In addition, the existing literature also lacks attention to consumer preferences for charging convenience and price sensitivity. Therefore, to fill this gap, this study develops four optimization models under the four scenarios of no subsidy (Model N), investment subsidy (Model I), operation subsidy (Model O), and compound subsidy (Model B) to examine and compare the effect of government subsidy. At the same time, consumer preferences are taken into account. The effects of policy, market, cost, and time factors on price, demand, and profit are discussed. Our general equilibrium analysis yields three important findings. First, the government subsidy for charging infrastructure is important and necessary. The government subsidy has a double effect. Differently, the investment subsidy has a direct effect only on the supply side, and the operation subsidy has a direct effect on both the supply and demand side. Thus, the operation subsidy would be a better choice than the investment subsidy. Second, increasing the construction level of charging infrastructure has a strong incentive effect on charging demand and can effectively inhibit refueling demand, while charging demand is less sensitive to changes in charging prices. Third, measures such as reducing the charging cost, increasing the refueling cost, and shortening the time gap are all favorable for promoting the charging infrastructure. This study not only extends the research on charging infrastructure policies from a theoretical perspective but also provides a reference for government policy adjustments. The government should provide appropriate policies according to the development status of different markets.

Suggested Citation

  • Liangui Peng & Ying Li, 2024. "Effects of diversified subsidies on the decisions of infrastructure operators considering charging infrastructure construction level and price sensitivity," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(5), pages 11343-11377, May.
    • Handle: RePEc:spr:endesu:v:26:y:2024:i:5:d:10.1007_s10668-023-03305-x
    DOI: 10.1007/s10668-023-03305-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-023-03305-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-023-03305-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhou, Guanghui & Chung, William & Zhang, Xiliang, 2013. "A study of carbon dioxide emissions performance of China's transport sector," Energy, Elsevier, vol. 50(C), pages 302-314.
    2. Baumgarte, Felix & Kaiser, Matthias & Keller, Robert, 2021. "Policy support measures for widespread expansion of fast charging infrastructure for electric vehicles," Energy Policy, Elsevier, vol. 156(C).
    3. Madina, Carlos & Zamora, Inmaculada & Zabala, Eduardo, 2016. "Methodology for assessing electric vehicle charging infrastructure business models," Energy Policy, Elsevier, vol. 89(C), pages 284-293.
    4. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    5. Azarova, Valeriya & Cohen, Jed J. & Kollmann, Andrea & Reichl, Johannes, 2020. "The potential for community financed electric vehicle charging infrastructure," Munich Reprints in Economics 84760, University of Munich, Department of Economics.
    6. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    7. Zhou, Guangyou & Zhu, Zhiwei & Luo, Sumei, 2022. "Location optimization of electric vehicle charging stations: Based on cost model and genetic algorithm," Energy, Elsevier, vol. 247(C).
    8. Josef Taalbi & Hana Nielsen, 2021. "The role of energy infrastructure in shaping early adoption of electric and gasoline cars," Nature Energy, Nature, vol. 6(10), pages 970-976, October.
    9. Jani Das, 2022. "Comparative life cycle GHG emission analysis of conventional and electric vehicles in India," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 13294-13333, November.
    10. Xiong, Siqin & Yuan, Yi & Yao, Jia & Bai, Bo & Ma, Xiaoming, 2023. "Exploring consumer preferences for electric vehicles based on the random coefficient logit model," Energy, Elsevier, vol. 263(PA).
    11. Adepetu, Adedamola & Keshav, Srinivasan & Arya, Vijay, 2016. "An agent-based electric vehicle ecosystem model: San Francisco case study," Transport Policy, Elsevier, vol. 46(C), pages 109-122.
    12. Jang, Sungsoon & Choi, Jae Young, 2021. "Which consumer attributes will act crucial roles for the fast market adoption of electric vehicles?: Estimation on the asymmetrical & heterogeneous consumer preferences on the EVs," Energy Policy, Elsevier, vol. 156(C).
    13. Ma, Shao-Chao & Fan, Ying, 2020. "A deployment model of EV charging piles and its impact on EV promotion," Energy Policy, Elsevier, vol. 146(C).
    14. Brozynski, Max T. & Leibowicz, Benjamin D., 2022. "A multi-level optimization model of infrastructure-dependent technology adoption: Overcoming the chicken-and-egg problem," European Journal of Operational Research, Elsevier, vol. 300(2), pages 755-770.
    15. Shanjun Li & Xianglei Zhu & Yiding Ma & Fan Zhang & Hui Zhou, 2022. "The Role of Government in the Market for Electric Vehicles: Evidence from China," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(2), pages 450-485, March.
    16. Jiayi Joey Yu & Christopher S. Tang & Musen Kingsley Li & Zuo‐Jun Max Shen, 2022. "Coordinating Installation of Electric Vehicle Charging Stations between Governments and Automakers," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 681-696, February.
    17. Huang, Xingjun & Lin, Yun & Lim, Ming K. & Zhou, Fuli & Liu, Feng, 2022. "Electric vehicle charging station diffusion: An agent-based evolutionary game model in complex networks," Energy, Elsevier, vol. 257(C).
    18. Yang, Libing & Ribberink, Hajo, 2019. "Investigation of the potential to improve DC fast charging station economics by integrating photovoltaic power generation and/or local battery energy storage system," Energy, Elsevier, vol. 167(C), pages 246-259.
    19. Gu, Xiaoyu & Ieromonachou, Petros & Zhou, Li, 2019. "Subsidising an electric vehicle supply chain with imperfect information," International Journal of Production Economics, Elsevier, vol. 211(C), pages 82-97.
    20. Arias, Mariz B. & Bae, Sungwoo, 2016. "Electric vehicle charging demand forecasting model based on big data technologies," Applied Energy, Elsevier, vol. 183(C), pages 327-339.
    21. Shao, Lulu & Yang, Jun & Zhang, Min, 2017. "Subsidy scheme or price discount scheme? Mass adoption of electric vehicles under different market structures," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1181-1195.
    22. Ledna, Catherine & Muratori, Matteo & Brooker, Aaron & Wood, Eric & Greene, David, 2022. "How to support EV adoption: Tradeoffs between charging infrastructure investments and vehicle subsidies in California," Energy Policy, Elsevier, vol. 165(C).
    23. Hong, Zhaofu & Wang, Hao & Yu, Yugang, 2018. "Green product pricing with non-green product reference," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 1-15.
    24. Chen, Rongkai & Fan, Ruguo & Wang, Dongxue & Yao, Qianyi, 2023. "Effects of multiple incentives on electric vehicle charging infrastructure deployment in China: An evolutionary analysis in complex network," Energy, Elsevier, vol. 264(C).
    25. Tao Peng & Hongwei Deng, 2021. "Research on the sustainable development process of low-carbon pilot cities: the case study of Guiyang, a low-carbon pilot city in south-west China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 2382-2403, February.
    26. Ghosh, Debabrata & Shah, Janat, 2015. "Supply chain analysis under green sensitive consumer demand and cost sharing contract," International Journal of Production Economics, Elsevier, vol. 164(C), pages 319-329.
    27. Serradilla, Javier & Wardle, Josey & Blythe, Phil & Gibbon, Jane, 2017. "An evidence-based approach for investment in rapid-charging infrastructure," Energy Policy, Elsevier, vol. 106(C), pages 514-524.
    28. Jing Liang & Yueming (Lucy) Qiu & Pengfei Liu & Pan He & Denise L. Mauzerall, 2023. "Effects of expanding electric vehicle charging stations in California on the housing market," Nature Sustainability, Nature, vol. 6(5), pages 549-558, May.
    29. Morrissey, Patrick & Weldon, Peter & O’Mahony, Margaret, 2016. "Future standard and fast charging infrastructure planning: An analysis of electric vehicle charging behaviour," Energy Policy, Elsevier, vol. 89(C), pages 257-270.
    30. Chen, Rui & Meng, Qiang & Yu, Jiayi Joey, 2023. "Optimal government incentives to improve the new technology adoption: Subsidizing infrastructure investment or usage?," Omega, Elsevier, vol. 114(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chu, Yi & Yu, Hui & Li, Ying, 2024. "How do supply- and demand-side dynamics and subsidies affect the prospects for electric vehicle battery swapping services? Evidence from an evolutionary analysis," Energy, Elsevier, vol. 308(C).
    2. Wang, Song & Shi, Lefeng, 2024. "EV diffusion promotion analysis under different charging market structure," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    3. Chen, Rongkai & Fan, Ruguo & Wang, Dongxue & Yao, Qianyi, 2023. "Effects of multiple incentives on electric vehicle charging infrastructure deployment in China: An evolutionary analysis in complex network," Energy, Elsevier, vol. 264(C).
    4. Xu, Zirui & Li, Ying & Li, Feifan, 2024. "Electric vehicle supply chain under dual-credit and subsidy policies: Technology innovation, infrastructure construction and coordination," Energy Policy, Elsevier, vol. 195(C).
    5. Dimanchev, Emil & Fleten, Stein-Erik & MacKenzie, Don & Korpås, Magnus, 2023. "Accelerating electric vehicle charging investments: A real options approach to policy design," Energy Policy, Elsevier, vol. 181(C).
    6. Mu Li & Yingqi Liu & Weizhong Yue, 2022. "Evolutionary Game of Actors in China’s Electric Vehicle Charging Infrastructure Industry," Energies, MDPI, vol. 15(23), pages 1-20, November.
    7. Yan Bao & Yu Luo & Weige Zhang & Mei Huang & Le Yi Wang & Jiuchun Jiang, 2018. "A Bi-Level Optimization Approach to Charging Load Regulation of Electric Vehicle Fast Charging Stations Based on a Battery Energy Storage System," Energies, MDPI, vol. 11(1), pages 1-21, January.
    8. Li Liu & Zhe Wang & Jiangtao Xu & Zaisheng Zhang, 2023. "Green baton: how government interventions advance green technological innovation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11121-11152, October.
    9. Gao, Yongling & Leng, Mingming & Zhang, Yaping & Liang, Liping, 2022. "Incentivizing the adoption of electric vehicles in city logistics: Pricing, driving range, and usage decisions under time window policies," International Journal of Production Economics, Elsevier, vol. 245(C).
    10. Zhongwei Chen & Zhi-Ping Fan, 2023. "Improvement strategies of battery driving range in an electric vehicle supply chain considering subsidy threshold and cost misreporting," Annals of Operations Research, Springer, vol. 326(1), pages 89-113, July.
    11. Chang, Tai-Wei, 2023. "An indispensable role in promoting the electric vehicle Industry: An empirical test to explore the integration framework of electric vehicle charger and electric vehicle purchase behavior," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    12. Mekky, Maher F. & Collins, Alan R., 2024. "The Impact of state policies on electric vehicle adoption -A panel data analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    13. Ma, Shao-Chao & Fan, Ying, 2020. "A deployment model of EV charging piles and its impact on EV promotion," Energy Policy, Elsevier, vol. 146(C).
    14. Yunhan Zheng & David R. Keith & Shenhao Wang & Mi Diao & Jinhua Zhao, 2024. "Effects of electric vehicle charging stations on the economic vitality of local businesses," Nature Communications, Nature, vol. 15(1), pages 1-11, December.
    15. Konstantina Anastasiadou & Nikolaos Gavanas, 2022. "State-of-the-Art Review of the Key Factors Affecting Electric Vehicle Adoption by Consumers," Energies, MDPI, vol. 15(24), pages 1-23, December.
    16. Tang, Juan & Ji, Guan-Qun & Liu, Zhi & Sheu, Jiuh-Biing, 2024. "Electric vehicle battery-charging service and operations managing under different charging station construction modes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 181(C).
    17. Chen, Rui & Meng, Qiang & Yu, Jiayi Joey, 2023. "Optimal government incentives to improve the new technology adoption: Subsidizing infrastructure investment or usage?," Omega, Elsevier, vol. 114(C).
    18. Kumar, Rajeev Ranjan & Chakraborty, Abhishek & Mandal, Prasenjit, 2021. "Promoting electric vehicle adoption: Who should invest in charging infrastructure?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    19. Lily Hanig & Catherine Ledna & Destenie Nock & Corey D. Harper & Arthur Yip & Eric Wood & C. Anna Spurlock, 2025. "Finding gaps in the national electric vehicle charging station coverage of the United States," Nature Communications, Nature, vol. 16(1), pages 1-13, December.
    20. Ding, Yanyan & Jian, Sisi, 2024. "Strategic investment in charging infrastructure: Sharing costs or taking over?," Applied Energy, Elsevier, vol. 376(PA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:endesu:v:26:y:2024:i:5:d:10.1007_s10668-023-03305-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.