How do supply- and demand-side dynamics and subsidies affect the prospects for electric vehicle battery swapping services? Evidence from an evolutionary analysis

The growing adoption of electric vehicles has highlighted the challenges associated with charging services. Slow charging has proven insufficient to address users' concerns about range anxiety, and the constraints within the power grid have impeded the expansion of fast charging infrastructure. Battery-swapping services have emerged as a potential resolution to this predicament. Despite government efforts to promote the advancement of battery-swapping services, the market's future remains to be determined. This study develops a network-based three-decision evolutionary game model to analyze the diffusion of battery-swapping services, considering subsidies along with supply- and demand-side dynamics. The result shows that: (1) Battery- swapping services win out in performance, and Charging Station (CS) only providing charging service will be gradually squeezed out by Battery Swapping Station (BSS) and Battery Charging-Swapping Station (BCSS). (2) It is more effective to subsidize station builders than users. Besides, avoiding over-subsidizing to prevent wastage and providing long-term subsidies for station builders are recommended, while user subsidies can be gradually phased out. (3) The charging/battery-swapping service price in the early stage exhibits a U-shaped effect on the decline of CS market share. (4) Proactively promoting the benefits of battery-swapping services can be a nudge.