A Game-theory Analysis Of Electric Vehicle Adoption In Beijing Under License Plate Control Policy

Having realized the deteriorating traffic situation and air quality,replacing gasoline vehicles with electric vehicles has been regarded as an efficient method in transportation sector to cope with the problems.To alleviate traffic congestion and protect the environment,Beijing government has implemented license plate control(LPC)policy since 2011.In 2019,for example,100,000 vehicle license plates were distributed,including 60,000 for electric vehicles(EVs)and 40,000 for gasoline vehicles(GVs).Nevertheless,whether the current license plate allocation is optimal from a social welfare maximization perspective remains unclear.This paper proposes a two-level Stackelberg game portraying the interactions between vehicle applicants and the government to figure out the imapcts of players’ behaviors on the license plate allocation and EV adoptions.Moreover,this paper quantifies the optimal number of EV license plates under Beijing’s LPC policy.This paper utilizes relevant data of Beijing’s Automotive industry to figure out the equilibrium solution and then conduct sensitivity analysis and scebario analysis to study the imapcts of important influential factors-total license plate quota,vehicle rental fee,and energy prices-on EV adoption.By means of the Stackelberg model,the equilibrium number of EV license plates is calculated as 58,800,which could increase the social welfare by 0.38%,compared with current allocation plan.Additionally,the license plate allocation plan under COVID-19 is also studied through the scenario analysis.If the government additionally increases the total quota by 20,000,24%of it could be allocated to GVs and 76%to EVs.Regarding the vehicle rental fee,one third reduction of current rental fee could increase EV license plates by 10.5%.In terms of energy prices,when gasoline price is in a low level,reducing electricity prices could contribute to EV adoption significantly,but that effect tapers off as gasoline prices increase.This paper suggests that policy-maker should trasnfer financial subsidy from EV purchaser to vehicle rental industry.Apart from it,the government should carry out regulations and intensify the supervision on the rental market to control the rental fee in an reasonable level.When the gasoline prices are low,the government could increase the competitiveness of EVs by reducing electricity price,while some alternative measurements should be taken to improve EV penetration as the gasoline prices rise,such as EV battery production cost reduction.