Optimal timing for nonsubsidized policy implementation in the electric vehicle industry

Abstract

AbstractThis research examines a scenario involving an electric vehicle (EV) manufacturer promoting innovation, a retailer focusing on advertising and service (A&S), and a government implementing nonsubsidized policies to enhance social welfare and spur EV adoption. The nonsubsidized policies under consideration are classified as ex‐ante (EA), ex‐ing (EI), or ex‐post (EP), depending on their chronological deployment. Our findings indicate that EI is consistently suboptimal due to the presence of the (anti‐)synergy effect. However, either the EA or EP policy proves optimal: EA is preferred when consumers value EV innovation and A&S whereas EP is desirable when associated costs are inefficient.