What are the roles of consumers, automobile production enterprises, and the government in the process of banning gasoline vehicles? Evidence from a tripartite evolutionary game model

The role of governmental policy in game between traditional fuel and new energy vehicles

The dual-credit policy model, a production strategy decision-making algorithm and application to Chinese automakers

The newly released dual-credit policy (DCP) in 2017 established a market-based credit trading scheme in China to facilitate the electrification transition of automobile manufacturers. However, it has not yet served its intended purpose perfectly. This study concerns the interaction between credit pricing and manufacturers’ electrification and develops a mathematical model of optimal investment timing and capacity utilization rate to investigate the traction mechanism and optimization strategy of the DCP. The results suggest that tightening the policy positively impacts electrification but does not necessarily lead to immediate investment by all manufacturers. Interestingly, while electrification leads firms to generate more credits to meet policy constraints, it promotes higher capacity utilization rates, resulting in equilibrium credit prices and greenhouse gas (GHG) emissions potentially rising rather than falling. Furthermore, a novel government target indicator that includes economic and environmental aspects is introduced to help revise the DCP and advise automobile manufacturers on electrification decisions. 

Interaction mechanism between dual-credit pricing and automobile manufacturers’ electrification decisions

The newly introduced dual-credit policy has made electrification inevitable for traditional automakers. This study considers stochastic credit prices and time-dependent electric vehicle (EV) investment costs to present a novel optimal decision model with three indicators: investment timing, research and development intensity, and product line allocation. This combinatorial optimization problem is solved by developing a genetic algorithm. The simulation result shows that the high profitability of EVs can accelerate electrification, while rapid credit price increases may instead d[1]elay it. Meanwhile, the Corporate Average Fuel Consumption (CFAC) credit rules outperform the New Energy Vehicle (NEV) credit rules in facilitating electrification and driving long-term cumulative EV productions. Interestingly, despite the pressure these rules bring, tightening them is not necessarily beneficial for boosting electrification. Overall, introducing credit ceiling and floor prices, or coordinating policy parameters by steadily tightening CAFC rules while appropriately moderating NEV rules, would effectively accelerate electrification and promote EV productions.

Electrification decisions of traditional automakers under the dual-credit policy regime

Based on the enterprise sample data and the national database, this paper analyses the carbon dioxide emissions in Anhui Province, including the carbon emissions in key areas, the classification of peak situation and the trend of carbon reduction by area. The results show that the power industry, cement industry and steel industry in Anhui Province have the largest proportion of carbon emissions. According to the characteristics and development trend of the industry, the carbon emissions of the power industry have shown a continuous upward trend, and the carbon emissions of the cement industry and the steel industry have gradually entered the platform period. In the future, the increment of renewable energy will become an important support for power supply and carbon emission reduction in Anhui Province in the long term, including clean power from outside the region.

Zhuru Chen

Papers

Electrification decisions of traditional automakers under the dual-credit policy regime

Research on carbon emission in key areas of Anhui province and development of energy and power industry