The Impact of Government Subsidies or Penalties for New-energy Vehicles<BR> A Static and Evolutionary Game Model Analysis

This paper provides an approach in the context of transport-generated carbon emissions reduction, discusses the interaction between the government and the vehicle manufacturer by using game theory, and focuses on how manufacturers' motivation can be tapped in order to encourage the adoption of advanced technologies to manufacture new-energy vehicles. The results of the analyses suggest that the strategic choices of the vehicle manufacturer would be influenced by government subsidies, penalties, and, to some extent, consumer environmental awareness. The results will be of particular interest to governments interested in guiding vehicle manufacturers towards making new-energy vehicles. © 2015 LSE and the University of Bath