The Underlying Reasons behind the Development of Public Electric Buses in China: The Beijing Case

Abstract

After great efforts towards the development of the electric vehicle (EV) industry and the use of its products in public transportation networks, more electric buses operate in China than in any other country in the world. As more investors will enter the industry, the effect of new participants on the development of the EV industry becomes an important issue. Based on the analysis of several key stakeholders (central and local governments, electric bus producers, users/bus companies, and providers of charging infrastructure in public transportation, this paper constructs a dynamic game-theory model to determine the main participants and their strategic space payoff functions, and ultimately estimates a Nash equilibrium. The dynamic game-model analysis clearly shows that the government’s decision to provide subsidies or not is currently affecting the entire industry and is an important prerequisite for a dynamic game. The user decides the pace of the development of this industry and the user’s management efficiency is a key factor affecting users’ needs. In addition, the availability of EVs and charging station facilities are equally important to the development of the industry.