System Dynamics Model for the Evolutionary Behaviour of Government Enterprises and Consumers in China’s New Energy Vehicle Market

Hongxia Sun, Yao Wan and Huirong Lv
Additional contact information
Hongxia Sun: Business School, Beijing Technology and Business University, Beijing 100048, China
Yao Wan: Business School, Beijing Technology and Business University, Beijing 100048, China
Huirong Lv: Business School, Beijing Technology and Business University, Beijing 100048, China

Sustainability, 2020, vol. 12, issue 4, 1-21

Abstract: Exhaust pollution and energy crises are worsening worldwide. China has become the largest motor vehicle producer; thus, promoting the use of new energy vehicles (NEVs) in China has important practical significance. In this paper, considering the limited rationality of governments, NEV enterprises and consumers, we study the subsidy policy of the China NEV market using the evolutionary game and system dynamics (SD) methods. First, a tripartite evolutionary game model is developed and the replicator dynamics equations and Jacobian matrix are obtained. A SD simulation of the model was conducted to further clarify the impact of the initial market proportion and three variables used in the model. The results show that the initial market proportion affects the evolution speed but does not affect the evolution result when the three group players all choose a mixed strategy. For governments, they should not hastily cancel price subsidies provided to consumers; rather, they should dynamically adjust the rate of the subsidy decrease and increase the consumers’ extra cost for purchasing fuel vehicles (FVs). NEV enterprises should appropriately increase their investments in the research and development (R&D) of NEVs.

Keywords: new energy vehicle; R&D investment; government subsidy; system dynamics (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/4/1578/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/4/1578/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:4:p:1578-:d:322826

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().