Coordinating Electric Vehicle Charging Station Installation between the Government and Automakers

In cognizant of the fact that accessibility of Electric Vehicle (EV) charging stations is an important determining factor for EV adoption, many governments are contemplating with the ideas of constructing extra EV charging stations directly or offering subsidy to entice automakers to construct more EV charging stations so that a certain EV adoption target is achieved. To do so, governments need to coordinate with automakers to ensure the total number of charging stations is planned optimally. In this paper, we examine this coordination problem by considering the case when the government can either build extra EV charging stations directly or offer “per station subsidy” to entice automakers to build them. Also, to achieve a certain EV adoption target, the government can also offer “per unit purchase subsidy” to consumers. By consider the interactions among the government, automakers, and consumers, our equilibrium analysis yields the following results. First, we find that either the government or the automakers (but not both) should build extra EV charging stations in order to achieve a certain EV adoption target. Second, the entity (the government or the automaker) that is responsible for constructing charging stations depends on the adoption target and the construction cost of EV stations. Third, when the construction cost is high, it can be more cost effective for the government to offer per unit purchase subsidy than to construct extra new charging stations directly or indirectly via per station subsidy. These results can be served as guidelines for the government when contemplating with the idea of constructing extra EV charging stations directly or providing incentives for automakers to build extra EV stations