Cooperation between competitive electric vehicle manufacturers: a strategic analysis of charging pile construction

Abstract

Electric vehicles (EVs) manufacturers building their own charging piles can enhance brand image and promote EVs sales, but which also induces huge investment. This paper studies the cooperation strategy of the charging pile construction between two competitive EV manufacturers. Assume that Manufacturer 1 (M1) has built its own branded charging stations. Considering whether Manufacturer 2 (M2) shares the construction costs of M1’s charging stations and whether M2 builds its own branded charging stations, this paper develops three corresponding models: non-cooperation, partial cooperation and fully cooperation, to explore the effect of cooperation on manufacturers’ decisions. Then we compare the results in the three models. Further, we extend our model to discuss the impacts of charging fee on the number of the charging piles and manufacturers’ profits. Finally, we present parameters’ sensitivity analysis. We find that (1) among the three strategies, M1’s and M2’s optimal strategies depend on the change of consumers’ sensitivity towards the number of the charging piles, the cost coefficient and cost sharing proportion; (2) there exists a dominant strategy that results in higher profits for both manufacturers compared to the other strategy; (3) M1 is more likely to gain more profits from non-cooperation and full cooperation and M2 is more likely to gain more profits from partial cooperation. (4) In non-cooperation and partial cooperation modes, an increase in charging fees will lead to an increase in the number of charging piles, while in full cooperation mode, an increase in charging fees may not necessarily lead to an increase in the number of charging piles.