Title

Promoting electric automobiles : supply chain analysis under a government's subsidy incentive scheme

Document Type

Journal article

Source Publication

IIE Transactions

Publication Date

4-29-2013

Volume

45

Issue

8

First Page

826

Last Page

844

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

Print ISSN

0740817X

E-ISSN

15458830

Publisher Statement

Copyright © “IIE”

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Full-text Version

Publisher’s Version

Recommended Citation

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