Supply chain leading models of building charging stations: Leaders, subsidy policies, and cost sharing

ABSTRACT

Consumer willingness to pay for electric vehicles (EVs) is severely limited by their driving range. The expansion of a charging network could alleviate this dilemma. This paper focuses on determining whether the manufacturer or the dealer is more suitable to extend charging network. In scenario 1 (wholesale price is exogenous), M-Investing (the manufacturer invests on charging stations) better facilitates EV adoption at the early stage of EV market. By contrast, D-Investing (the dealer invests on charging stations) better facilitates the EV adoption when the market becomes mature. However, neither of the two investors have an incentive to offer building investment. In scenario 2 (wholesale price is a decision made by the manufacturer), M-Investing is consistently better than D-Investing in terms of facilitating EV adoption. The manufacturer is voluntary even with high building costs. In addition, we address two subsidy policies: producer subsidy and consumer subsidy, to determine which is more effective in facilitating EV adoption in M-Investing and D-Investing, respectively. Moreover, we extend our model by allowing cost sharing between the manufacturer and the dealer. We observe some cases in which the profit and the EV adoption level are improved.

KEYWORDS:

• Charging stations
• electric vehicles
• range anxiety
• supply chain perspective

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Erratum

Notes

¹ In our paper, we group all categories of electric vehicles, i.e., battery and plug-in hybrid, hybrid and fuel cell, and summarize them as electric vehicles. Although they are very different types, many countries also group them together when setting electric vehicle adoption goals. Furthermore, all types have the problem of very limited driving range.

² See Tesla Motors, Supercharger. http://www.teslamotors.com/supercharger.

³ https://www.truecar.com/

⁴ http://www.chargepoint.com, retrieved 1 November 2016.

⁵ http://www.sgcc.com.cn/ywlm/gsyw-e/218933.shtml, retrieved 1 November 2016.

Additional information

Funding

National Natural Science Foundation of China and Grant number 71701073; National Natural Science Foundation of China and Grant number 71671075; National Natural Science Foundation of China and Grant number 71320107001.