A Game-Theory Analysis of Electric Vehicle Adoption in Beijing under License Plate Control Policy

Lijing Zhu, Jingzhou Wang, Arash Farnoosh () and Xunzhang Pan
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Lijing Zhu: China University of Petroleum
Jingzhou Wang: China University of Petroleum
Arash Farnoosh: IFPEN - IFP Energies nouvelles, IFP School
Xunzhang Pan: China University of Petroleum

Working Papers from HAL

Abstract: To reduce traffic congestion and protect the environment, license plate control (LPC) policy has been implemented in Beijing since 2011. In 2019, 100,000 vehicle license plates were distributed, including 60,000 for electric vehicle (EV) and 40,000 for gasoline vehicle (GV). However, whether the current license plate allocation is optimal from a social welfare maximization perspective remains unclear. This paper proposes a two-level Stackelberg game which portrays the interaction between vehicle applicants and the government to quantify the optimal EV license plates under the LPC policy in Beijing. The equilibrium number of EV license plates derived from the Stackelberg model is 58,800, which could increase the social welfare by 0.38%. Sensitivity analysis is conducted to illustrate the impact of important influential factors — total license plate quota, vehicle rental fee, and energy price — on EV adoption. The LPC policy under COVID-19 is also studied through a scenario analysis. If the government additionally increases the total quota by 20,000, 24% could be allocated to GV and 76% to EV. One third reduction of the current vehicle rental fee could increase EV license plates by 10.5%. Interms of energy prices, when gasoline price is low, reducing electricity price could contribute to EV adoption significantly, while that effect tapers off as the gasoline price rises.

Keywords: Electric vehicle; License plate control (LPC) policy; Stackelberg game theory; License plate quota (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-cna, nep-ene, nep-gth and nep-tre
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