Government Subsidies and Manufacturer Investment Decisions in the Electric Vehicle Industry: An Evolutionary Game Analysis

Liu Cao () and Qingmei Tan
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Liu Cao: Nanjing University of Aeronautics and Astronautics, College of Economics and Management
Qingmei Tan: Nanjing University of Aeronautics and Astronautics, College of Economics and Management

A chapter in Proceedings of the 2025 5th International Conference on Informatization Economic Development and Management (IEDM 2025), 2025, pp 88-94 from Springer

Abstract: Abstract This study analyzes the interaction between government subsidy policies and electric vehicle (EV) manufacturers’ investment decisions using an evolutionary game theory model. The government can choose to provide subsidies or not, while EV manufacturers decide whether to invest in production based on the subsidies offered. The model shows that government subsidies can encourage investment by manufacturers, but the optimal subsidy level depends on the strategic behaviors of both parties. Numerical simulations reveal that balanced subsidy policies, considering both production costs and social benefits, lead to a stable equilibrium. This research provides insights into the design of effective subsidy policies to promote the growth of the EV industry.

Keywords: Electric vehicles; government subsidies; investment decisions; evolutionary game theory (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-724-3_9

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DOI: 10.2991/978-94-6463-724-3_9

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