STRATEGIC DEPLOYMENT OF INFRASTRUCTURE FOR ELECTRIC VEHICLE

Driven by serious concerns over global climate change and energy crisis, Electric Vehicles (EVs) have been proposed to be the centerpiece of solutions to reduce energy consumption and greenhouse gas emissions in the transportation sector. However, mass adoption of EVs has been barred by concerns over limited driving range and low charging speed. To overcome these issues, EV service providers propose the deployment of charging and battery swapping infrastructure networks to enable driving flexibility of EVs. Governments have also announced different policies to encourage mass adoption. In this paper, we build a stylized model to study the dynamic interactions between the firm's pricing and service network coverage decisions, and the potential consumers' adoption decisions. After deriving the equilibrium results for this model, we analyze the effectiveness of two categories of government stimulus policies. We show that in some scenarios, subsidizing early adopters may reduce the firm's incentives to extend the infrastructure network coverage, leading to lower adoption figures. Despite political considerations, direct subsidies to the firm for infrastructure investments can help improve the service network coverage and the whole adoption figures.