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Article
Promoting electric automobiles : supply chain analysis under a government's subsidy incentive scheme
IIE Transactions
  • Jian HUANG, Jiangxi University of Finance and Economics, Nan Chang, China
  • Mingming LENG, Lingnan University, Hong Kong
  • Liping LIANG, Lingnan University, Hong Kong
  • Jian LIU, Jiangxi University of Finance and Economics, Nan Chang, China
Document Type
Journal article
Publication Date
4-29-2013
Keywords
  • Electric automobile,
  • supply chain,
  • government subsidy,
  • incentive scheme,
  • social welfare
Abstract
This article analyzes a Fuel Automobile (FA) supply chain and an electric-and-fuel automobile supply chain in a duopoly setting, under a government's subsidy incentive scheme that is implemented to promote the use of Electric Automobiles (EAs) for the control of air pollution. Benefiting from such a scheme, each EA consumer can enjoy a subsidy from the government. It is shown that the incentive scheme is more effective in increasing the sales of EAs when consumers' bargaining power is stronger. The impact of the incentive scheme on consumers' net surplus is the largest among all components in the social welfare. A higher subsidy may not result in a greater reduction in the environmental hazard. Moreover, a larger number of service and charging stations can reduce the negative impact of the incentive scheme on the FA market while enhancing its positive impact on the EA market. An incentive scheme with the centralized control with no subsidy is also considered and it is found that the incentive scheme is more effective in promoting EAs and protecting the environment.
DOI
10.1080/0740817X.2012.763003
E-ISSN
15458830
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Citation Information
Huang, J., Leng, M., Liang, L., & Liu, J. (2013). Promoting electric automobiles: Supply chain analysis under a government's subsidy incentive scheme. IIE Transactions, 45(8), 826-844. doi: 10.1080/0740817X.2012.763003