Incentivizing the adoption of electric vehicles under subsidy schemes: A duopoly analysis

Yongling GAO, Mingming LENG

Research output: Journal PublicationsJournal Article (refereed)peer-review


We analyze the competition between an electric vehicle (EV) manufacturer and an internal combustion vehicle manufacturer, under a government's subsidy scheme that provides a per-unit subsidy to the EV manufacturer or a price discount subsidy to EV consumers. The government should adopt the per-unit subsidy scheme, because, compared to the price-discount scheme, the government under the per-unit scheme can achieve the same EV sales and social welfare but pay for a smaller total subsidy.
Original languageEnglish
Pages (from-to)473-476
Number of pages4
JournalOperations Research Letters
Issue number4
Early online date13 May 2021
Publication statusE-pub ahead of print - 13 May 2021

Bibliographical note

The first author (Yongling Gao) was supported by the Humanities and Social Science Research Project of Ministry of Education of China (17YJC630027) and the National Social Science Fund of China (18BGL217). The second author (Mingming Leng) was supported by the General Research Fund (GRF) of the Hong Kong Research Grants Council under Research Project No. LU13500020.


  • Electric vehicles
  • Subsidy
  • Driving range
  • Game theory
  • Duopoly

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