Essays on Electric Vehicles Ecosystem Development




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This dissertation consists of three essays which study government subsidies, manufacturer decisions, and innovative business models motivated by problems in electric vehicle and other green product markets. In Chapter 2, we investigate the optimal consumer and station subsidies to promote electric vehicles by modeling the interactions between the government and the charging supplier. We formally show that the charging inconvenience is decreasing convex with the number of stations. In the expenditure minimization case, the optimal policy depends on the government adoption target and the charging station construction cost. We establish that expenditure minimization and adoption maximization yield the same subsidy policy if the charging inconvenience is linear. We also conduct a numerical study with real-life fueling data in Beijing, compute the optimal decisions and obtain the magnitude of subsidies and show their consistency with the analytical results. In Chapter 3, we develop two-period game-theoretical models between the government and the green product manufacturer(s) to study their optimal decisions in the context of subsidy termination. We also incorporate learning effect as green products are usually costly and present ample opportunities for cost reduction. Under subsidy termination, we find that the manufacturer would adopt a sandwiched pricing strategy and the government prefers no-advance sales termination mechanism which leads to lower subsidy expenditure. We further show that competition acts as a substitute for the subsidy, and thus the government can provide a lower consumer subsidy as the green product market matures to become competitive. Interestingly, the cooperation through group learning may outperform the competition between manufacturers. Our study illustrates these interesting ways subsidy, learning and competition interact with each other, which provide important managerial insights as well as practical suggestions to different players. In Chapter 4, we study a flexible electric vehicle battery lease program where customers lease batteries of their chosen capacities with the option to temporarily up/downgrade to batteries of different capacities during a peak period. Adopting a game-theoretical model, we find that the manufacturer may depend on acquiring additional batteries or reallocating customers’ batteries to satisfy the peak up/downgrade demands, and that flexible battery leasing can lead to win-win outcomes (increased manufacturer profit and reduced customer total cost) compared with simple battery leasing. The results are found to be robust for different levels of customer sophistication, noncommittal battery acquisition, and correlated regular and peak needs for range. These findings inform electric vehicle manufacturers adopting the innovative business model and highlight the value of flexible battery leasing.



Operations Research, Political Science, Public Administration, Environmental Sciences