Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study
Governments encourage use of electric vehicles (EV) via regulation and investment to minimize greenhouse gas (GHG) emissions. Manufacturers produce vehicles to maximize profit, given available public infrastructure and government incentives. EV public adoption depends not only on price and vehicle a...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Cambridge University Press
2016-01-01
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| Series: | Design Science |
| Subjects: | |
| Online Access: | https://www.cambridge.org/core/product/identifier/S205347011600007X/type/journal_article |
| _version_ | 1811156443213070336 |
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| author | Namwoo Kang Yi Ren Fred M. Feinberg Panos Y. Papalambros |
| author_facet | Namwoo Kang Yi Ren Fred M. Feinberg Panos Y. Papalambros |
| author_sort | Namwoo Kang |
| collection | DOAJ |
| description | Governments encourage use of electric vehicles (EV) via regulation and investment to minimize greenhouse gas (GHG) emissions. Manufacturers produce vehicles to maximize profit, given available public infrastructure and government incentives. EV public adoption depends not only on price and vehicle attributes, but also on EV market size and infrastructure available for refueling, such as charging station proximity and recharging length and cost. Earlier studies have shown that government investment can create EV market growth, and that manufacturers and charging station operators must cooperate to achieve overall profitability. This article describes a framework that connects decisions by the three stakeholders (government, EV manufacturer, charging station operator) with preferences of the driving public. The goal is to develop a framework that allows the effect of government investment on the EV market to be quantified. This is illustrated in three scenarios in which we compare optimal public investment for a city in USA (Ann Arbor, Michigan) and one in China (Beijing) to minimize emissions, accounting for customer preferences elicited from surveys conducted in the two countries. Under the modeling assumptions of the framework, we find that high customer sensitivity to prices, combined with manufacturer and charging station operator profit maximization strategies, can render government investment in EV subsidies ineffective, while a collaboration among stakeholders can achieve both emission reduction and profitability. When EV and station designs improve beyond a certain threshold, government investment influence on EV adoption is attenuated apparently due to diminishing customer willingness to buy. Furthermore, our analysis suggests that a diversified government investment portfolio could be especially effective for the Chinese market, with charging costs and price cuts on license plate fees being as important as EV subsidies. |
| first_indexed | 2024-04-10T04:51:41Z |
| format | Article |
| id | doaj.art-8b3a4587eba7465086fc1cdafcab6571 |
| institution | Directory Open Access Journal |
| issn | 2053-4701 |
| language | English |
| last_indexed | 2024-04-10T04:51:41Z |
| publishDate | 2016-01-01 |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Design Science |
| spelling | doaj.art-8b3a4587eba7465086fc1cdafcab65712023-03-09T12:31:54ZengCambridge University PressDesign Science2053-47012016-01-01210.1017/dsj.2016.7Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison studyNamwoo Kang0Yi Ren1Fred M. Feinberg2Panos Y. Papalambros3Department of Mechanical Engineering, University of Michigan, Ann Arbor, MI, USADepartment of Mechanical Engineering, Arizona State University, Tempe, AZ, USARoss School of Business, University of Michigan, Ann Arbor, MI, USAIntegrative Systems and Design Division, University of Michigan, Ann Arbor, MI, USAGovernments encourage use of electric vehicles (EV) via regulation and investment to minimize greenhouse gas (GHG) emissions. Manufacturers produce vehicles to maximize profit, given available public infrastructure and government incentives. EV public adoption depends not only on price and vehicle attributes, but also on EV market size and infrastructure available for refueling, such as charging station proximity and recharging length and cost. Earlier studies have shown that government investment can create EV market growth, and that manufacturers and charging station operators must cooperate to achieve overall profitability. This article describes a framework that connects decisions by the three stakeholders (government, EV manufacturer, charging station operator) with preferences of the driving public. The goal is to develop a framework that allows the effect of government investment on the EV market to be quantified. This is illustrated in three scenarios in which we compare optimal public investment for a city in USA (Ann Arbor, Michigan) and one in China (Beijing) to minimize emissions, accounting for customer preferences elicited from surveys conducted in the two countries. Under the modeling assumptions of the framework, we find that high customer sensitivity to prices, combined with manufacturer and charging station operator profit maximization strategies, can render government investment in EV subsidies ineffective, while a collaboration among stakeholders can achieve both emission reduction and profitability. When EV and station designs improve beyond a certain threshold, government investment influence on EV adoption is attenuated apparently due to diminishing customer willingness to buy. Furthermore, our analysis suggests that a diversified government investment portfolio could be especially effective for the Chinese market, with charging costs and price cuts on license plate fees being as important as EV subsidies.https://www.cambridge.org/core/product/identifier/S205347011600007X/type/journal_articleenergy policy designvehicle electrificationdesign for market systemsservice design |
| spellingShingle | Namwoo Kang Yi Ren Fred M. Feinberg Panos Y. Papalambros Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study Design Science energy policy design vehicle electrification design for market systems service design |
| title | Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study |
| title_full | Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study |
| title_fullStr | Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study |
| title_full_unstemmed | Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study |
| title_short | Public investment and electric vehicle design: a model-based market analysis framework with application to a USA–China comparison study |
| title_sort | public investment and electric vehicle design a model based market analysis framework with application to a usa china comparison study |
| topic | energy policy design vehicle electrification design for market systems service design |
| url | https://www.cambridge.org/core/product/identifier/S205347011600007X/type/journal_article |
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