IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i4p3410-d1066796.html
   My bibliography  Save this article

A Study on the Evolution of Competition in China’s Auto Market Considering Market Capacity Constraints and a Game Payoff Matrix: Based on the Dual Credit Policy

Author

Listed:
  • Ying Xie

    (School of Economics and Management, Jiangsu University of Science and Technology, Zhenjiang 212003, China)

  • Jie Wu

    (School of Economics and Management, Jiangsu University of Science and Technology, Zhenjiang 212003, China)

  • Hannian Zhi

    (School of Economics and Management, Jiangsu University of Science and Technology, Zhenjiang 212003, China)

  • Muhammad Riaz

    (School of Economics and Management, Jiangsu University of Science and Technology, Zhenjiang 212003, China)

  • Liangpeng Wu

    (Research Center of Risk Management and Emergency Decision Making, School of Management Science and Engineering, Nanjing University of Information Science and Technology, Nanjing 210044, China)

Abstract

The dual credit policy is currently the main starting point for China to achieve the green and sustainable development of the auto market. However, the policy’s impact on future market development remains unclear. It is necessary to consider the market capacity constraints and the market competition environment. By researching the impact of the dual credit policy on the micro-decision-making of automakers and the long-term evolution of the macro-auto market, the effect of the dual credit policy on the Chinese auto industry is obtained. This paper considers the market capacity constraint, combines the competitive relationship and game payment matrix between NEV makers and CFV makers, constructs a game model of the competition density between NEVs and CFVs, simulates the development and evolution of China’s auto market size, and analyzes the effect of the quantitative parameters of the dual credit policy on the auto market. The results show that: (1) the increase in NEV makers’ sale of credits will stimulate their production incentives, and the increase in conventional fuel vehicle (CFV) makers’ cost of purchasing credits will reduce their production incentives; (2) tightened fuel consumption standards for CFVs has an enhanced stimulating effect on the increase in the market share of NEVs, which can effectively reduce the market share of CFVs; (3) the price of credits facilitates the growth of the NEV market share, but credit prices that are too high do not stimulate the growth of the NEV market share to a significant degree; (4) the increase in the proportion of credits required for NEVs and the increase in the price of credits together help to reduce the market share of CFVs and increase the market share of NEVs.

Suggested Citation

  • Ying Xie & Jie Wu & Hannian Zhi & Muhammad Riaz & Liangpeng Wu, 2023. "A Study on the Evolution of Competition in China’s Auto Market Considering Market Capacity Constraints and a Game Payoff Matrix: Based on the Dual Credit Policy," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3410-:d:1066796
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/4/3410/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/4/3410/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yu, Yi & Zhou, Dequn & Zha, Donglan & Wang, Qunwei & Zhu, Qingyuan, 2021. "Optimal production and pricing strategies in auto supply chain when dual credit policy is substituted for subsidy policy," Energy, Elsevier, vol. 226(C).
    2. Liu, Hu-Chen & You, Xiao-Yue & Xue, Yi-Xi & Luan, Xue, 2017. "Exploring critical factors influencing the diffusion of electric vehicles in China: A multi-stakeholder perspective," Research in Transportation Economics, Elsevier, vol. 66(C), pages 46-58.
    3. Liukai Yu & Xuehai Jiang & Yujie He & Yangyang Jiao, 2022. "Promoting the Diffusion of New Energy Vehicles under Dual Credit Policy: Asymmetric Competition and Cooperation in Complex Network," Energies, MDPI, vol. 15(15), pages 1-20, July.
    4. Yu, Yang & Li, Shuangqi & Sun, Huaping & Taghizadeh-Hesary, Farhad, 2021. "Energy carbon emission reduction of China’s transportation sector: An input–output approach," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 378-393.
    5. Daniel Friedman, 1998. "On economic applications of evolutionary game theory," Journal of Evolutionary Economics, Springer, vol. 8(1), pages 15-43.
    6. Fan, Ruguo & Dong, Lili, 2018. "The dynamic analysis and simulation of government subsidy strategies in low-carbon diffusion considering the behavior of heterogeneous agents," Energy Policy, Elsevier, vol. 117(C), pages 252-262.
    7. Kong, Deyang & Xia, Quhong & Xue, Yixi & Zhao, Xin, 2020. "Effects of multi policies on electric vehicle diffusion under subsidy policy abolishment in China: A multi-actor perspective," Applied Energy, Elsevier, vol. 266(C).
    8. Pan, Xunzhang & Wang, Lining & Dai, Jiaquan & Zhang, Qi & Peng, Tianduo & Chen, Wenying, 2020. "Analysis of China’s oil and gas consumption under different scenarios toward 2050: An integrated modeling," Energy, Elsevier, vol. 195(C).
    9. Wang, Shanyong & Wang, Jing & Li, Jun & Wang, Jinpeng & Liang, Liang, 2018. "Policy implications for promoting the adoption of electric vehicles: Do consumer’s knowledge, perceived risk and financial incentive policy matter?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 117(C), pages 58-69.
    10. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    11. Li, Jizi & Ku, Yaoyao & Yu, Yue & Liu, Chunling & Zhou, Yuping, 2020. "Optimizing production of new energy vehicles with across-chain cooperation under China’s dual credit policy," Energy, Elsevier, vol. 194(C).
    12. Li, Yaoming & Zhang, Qi & Liu, Boyu & McLellan, Benjamin & Gao, Yuan & Tang, Yanyan, 2018. "Substitution effect of New-Energy Vehicle Credit Program and Corporate Average Fuel Consumption Regulation for Green-car Subsidy," Energy, Elsevier, vol. 152(C), pages 223-236.
    13. Sierzchula, William & Nemet, Gregory, 2015. "Using patents and prototypes for preliminary evaluation of technology-forcing policies: Lessons from California's Zero Emission Vehicle regulations," Technological Forecasting and Social Change, Elsevier, vol. 100(C), pages 213-224.
    14. Ji, Shou-feng & Zhao, Dan & Luo, Rong-juan, 2019. "Evolutionary game analysis on local governments and manufacturers' behavioral strategies: Impact of phasing out subsidies for new energy vehicles," Energy, Elsevier, vol. 189(C).
    15. Ziyue Wang & Juan Zhang & Huiju Zhao, 2020. "The Selection of Green Technology Innovations under Dual-Credit Policy," Sustainability, MDPI, vol. 12(16), pages 1-22, August.
    16. Shi, Yingying & Wei, Zixiang & Shahbaz, Muhammad & Zeng, Yongchao, 2021. "Exploring the dynamics of low-carbon technology diffusion among enterprises: An evolutionary game model on a two-level heterogeneous social network," Energy Economics, Elsevier, vol. 101(C).
    17. Ou, Shiqi & Lin, Zhenhong & Qi, Liang & Li, Jie & He, Xin & Przesmitzki, Steven, 2018. "The dual-credit policy: Quantifying the policy impact on plug-in electric vehicle sales and industry profits in China," Energy Policy, Elsevier, vol. 121(C), pages 597-610.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fan, Ruguo & Bao, Xuguang & Du, Kang & Wang, Yuanyuan & Wang, Yitong, 2022. "The effect of government policies and consumer green preferences on the R&D diffusion of new energy vehicles: A perspective of complex network games," Energy, Elsevier, vol. 254(PA).
    2. Zhao, Dan & Ji, Shou-feng & Wang, He-ping & Jiang, Li-wen, 2021. "How do government subsidies promote new energy vehicle diffusion in the complex network context? A three-stage evolutionary game model," Energy, Elsevier, vol. 230(C).
    3. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
    4. Meng, Weidong & Ma, Miaomiao & Li, Yuyu & Huang, Bo, 2022. "New energy vehicle R&D strategy with supplier capital constraints under China's dual credit policy," Energy Policy, Elsevier, vol. 168(C).
    5. Yi, Yongxi & Zhang, Meng & Zhang, Aoxiang & Li, Yuqiong, 2024. "Can “dual credit” replace “subsidies” successfully? -based on analysis of vehicle supply chain decisions under the digital transformation of technology," Energy Economics, Elsevier, vol. 130(C).
    6. Jizi Li & Yuping Zhou & Dengke Yu & Chunling Liu, 2020. "Consumers’ Purchase Intention of New Energy Vehicles: Do Product-Life-Cycle Policy Portfolios Matter?," Sustainability, MDPI, vol. 12(5), pages 1-23, February.
    7. Lian Ding & Xiaodong Zhu, 2023. "The Impact of the Dual-Credit Policy on Production and Cooperative R&D in the Automotive Supply Chain," Sustainability, MDPI, vol. 15(2), pages 1-18, January.
    8. Yu, Hui & Li, Ying & Wang, Wei, 2023. "Optimal innovation strategies of automakers with market competition under the dual-credit policy," Energy, Elsevier, vol. 283(C).
    9. Yushi Wang & Licheng Sun & Shilong Li, 2022. "Production Decisions of Automakers Considering the Impact of Anticipated Regret under the Dual-Credit Policy," Sustainability, MDPI, vol. 14(11), pages 1-18, May.
    10. Yu, Liukai & Zheng, Junjun & Ma, Gang & Jiao, Yangyang, 2023. "Analyzing the evolution trend of energy conservation and carbon reduction in transportation with promoting electrification in China," Energy, Elsevier, vol. 263(PD).
    11. Yuchao Li & Lijie Zhang & Jiamin Liu & Xinpei Qiao, 2023. "Can the Dual-Credit Policy Help China’s New Energy Vehicle Industry Achieve Corner Overtaking?," Sustainability, MDPI, vol. 15(3), pages 1-22, January.
    12. Ma, Haicheng & Lou, Gaoxiang & Fan, Tijun & Chan, Hing Kai & Chung, Sai Ho, 2021. "Conventional automotive supply chains under China's dual-credit policy: fuel economy, production and coordination," Energy Policy, Elsevier, vol. 151(C).
    13. Zhang, Mingye & Yang, Min & Gao, Yangfan, 2024. "Tripartite evolutionary game and simulation analysis of electric bus charging facility sharing under the governmental reward and punishment mechanism," Energy, Elsevier, vol. 307(C).
    14. Ruguo Fan & Rongkai Chen, 2022. "Promotion Policies for Electric Vehicle Diffusion in China Considering Dynamic Consumer Preferences: A Network-Based Evolutionary Analysis," IJERPH, MDPI, vol. 19(9), pages 1-21, April.
    15. Nie, Qingyun & Zhang, Lihui & Tong, Zihao & Hubacek, Klaus, 2022. "Strategies for applying carbon trading to the new energy vehicle market in China: An improved evolutionary game analysis for the bus industry," Energy, Elsevier, vol. 259(C).
    16. Dongpu Fu & Jiarui Sun & Cuiyou Yao & Fulei Shi, 2024. "The influence of policy incentives on the diffusion of battery-swapping taxis and stations: a coupled evolutionary game model in complex networks," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 26945-26969, October.
    17. Ziyue Wang & Juan Zhang & Huiju Zhao, 2020. "The Selection of Green Technology Innovations under Dual-Credit Policy," Sustainability, MDPI, vol. 12(16), pages 1-22, August.
    18. Dong-Xiao Yang & Lei Yang & Xiao-Ling Chen & Chan Wang & Pu-Yan Nie, 2023. "Research on credit pricing mechanism in dual-credit policy: is the government in charge or is the market in charge?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1561-1581, February.
    19. Feng Liu & Yingshuang Tan & Sudipto Sarkar & Xueqing Zhang & Xingjun Huang, 2023. "When to invest in electric vehicles under dual credit policy: A real options approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2186-2198, June.
    20. Ma, Miaomiao & Meng, Weidong & Li, Yuyu & Huang, Bo, 2023. "Impact of dual credit policy on new energy vehicles technology innovation with information asymmetry," Applied Energy, Elsevier, vol. 332(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:4:p:3410-:d:1066796. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.