Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective
In order to address challenges in the sustainable development of transportation, economy, and environment, governments of China and conventional automobile manufacturers are extremely concerned about the development of the electric vehicle (EV) manufacturing industry and market. However, owing to th...
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doaj-659891ebc08545c6921e8766834c78f12020-11-25T02:51:14ZengMDPI AGSustainability2071-10502018-03-0110367210.3390/su10030672su10030672Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare PerspectiveXiaoxue Zheng0Haiyan Lin1Zhi Liu2Dengfeng Li3Carlos Llopis-Albert4Shouzhen Zeng5College of Transportation and Civil Engineering, Fujian Agriculture and Forestry University, Fuzhou 350002, ChinaCollege of Transportation and Civil Engineering, Fujian Agriculture and Forestry University, Fuzhou 350002, ChinaCollege of Management Engineering, Anhui Polytechnic University, Wuhu 241000, ChinaSchool of Economics and Management, Fuzhou University, Fuzhou 350002, ChinaDepartamento de Ingeniería Mecánica y de Materiales (DIMM), Universitat Politècnica de València, Camino de Vera s/n, 46022 Valencia, SpainSchool of Business, Ningbo University, Ningbo 315211, ChinaIn order to address challenges in the sustainable development of transportation, economy, and environment, governments of China and conventional automobile manufacturers are extremely concerned about the development of the electric vehicle (EV) manufacturing industry and market. However, owing to the limitations of EVs and the government economic policies on decreasing subsidies in China, many manufacturers are worried about entering the EV market. Given the low consumer preference for EVs, using a leader-follower Stackelberg game model, we investigate the impact of government a subsidy on the optimal production and pricing decisions of an auto manufacturer who could produce both EVs and conventional vehicles. We characterize whether/under what conditions the manufacturer’s decision to offer EV products under government subsidy, whilst increasing its profits (a win-win situation). On the policy side, we delineate how government a subsidy can be set to realize the inherent economic, environmental, and social benefits of EV production (the triple win of EV production). We further investigate the impact of EV manufacturing- and society-related factors on the balance among manufacturer profits, environmental impact and social welfare. This study also finds that the adoption of EVs is not bound to be beneficial for the environment.http://www.mdpi.com/2071-1050/10/3/672electric vehicleChina’s subsidy policyEVs manufacturing decisionssocial welfareenvironmental impact |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Xiaoxue Zheng Haiyan Lin Zhi Liu Dengfeng Li Carlos Llopis-Albert Shouzhen Zeng |
spellingShingle |
Xiaoxue Zheng Haiyan Lin Zhi Liu Dengfeng Li Carlos Llopis-Albert Shouzhen Zeng Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective Sustainability electric vehicle China’s subsidy policy EVs manufacturing decisions social welfare environmental impact |
author_facet |
Xiaoxue Zheng Haiyan Lin Zhi Liu Dengfeng Li Carlos Llopis-Albert Shouzhen Zeng |
author_sort |
Xiaoxue Zheng |
title |
Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective |
title_short |
Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective |
title_full |
Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective |
title_fullStr |
Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective |
title_full_unstemmed |
Manufacturing Decisions and Government Subsidies for Electric Vehicles in China: A Maximal Social Welfare Perspective |
title_sort |
manufacturing decisions and government subsidies for electric vehicles in china: a maximal social welfare perspective |
publisher |
MDPI AG |
series |
Sustainability |
issn |
2071-1050 |
publishDate |
2018-03-01 |
description |
In order to address challenges in the sustainable development of transportation, economy, and environment, governments of China and conventional automobile manufacturers are extremely concerned about the development of the electric vehicle (EV) manufacturing industry and market. However, owing to the limitations of EVs and the government economic policies on decreasing subsidies in China, many manufacturers are worried about entering the EV market. Given the low consumer preference for EVs, using a leader-follower Stackelberg game model, we investigate the impact of government a subsidy on the optimal production and pricing decisions of an auto manufacturer who could produce both EVs and conventional vehicles. We characterize whether/under what conditions the manufacturer’s decision to offer EV products under government subsidy, whilst increasing its profits (a win-win situation). On the policy side, we delineate how government a subsidy can be set to realize the inherent economic, environmental, and social benefits of EV production (the triple win of EV production). We further investigate the impact of EV manufacturing- and society-related factors on the balance among manufacturer profits, environmental impact and social welfare. This study also finds that the adoption of EVs is not bound to be beneficial for the environment. |
topic |
electric vehicle China’s subsidy policy EVs manufacturing decisions social welfare environmental impact |
url |
http://www.mdpi.com/2071-1050/10/3/672 |
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