Optimal Deployment of Charging Piles for Electric Vehicles under the Indirect Network Effects

Abstract

It has been found that there is a close relationship between the popularization of electric vehicles and the deployment of the charging facilities, which provides either positive or negative feedback. Given the existence of the double feedback mechanism, namely the indirect network effects, we aim to quantify it by means of empirical research and mathematical modeling. We start with the decision equations, which consist of the consumer's adoption decision equation and the charging-pile operator's entrance decision equation. We quantify the influence process by analyzing the equilibrium state and critical equilibrium point. Compared with the general situation in which the scale of the charging piles is decided by the number of electric vehicles, we find that the decision that takes the indirect network effects into consideration has a great positive impact on the popularization of electric vehicles. Our findings shed light on the formulation of incentive policy and the charging-pile operator's decision-making. We also apply location theory to address the issue of charging-pile points layout in practice.