Development of Charging Infrastructure and Subsidies for Promoting Electric Vehicles

Abstract

This paper clarifies an effect of policy on the development of charging infrastructure and subsidies for promoting electric vehicles (EVs). Due to the long-term function of charging infrastructure, this paper constructs a multiple-period model to analyze policy effects on the diffusion of EVs from a long-term perspective. This paper shows that charging infrastructure and subsidy encourage innovation on increasing the battery capacity of EVs. Because intertemporal cost allocation can be executed in the development of a charging infrastructure with a subsidy, a policy with a long-term perspective can enhance the charging infrastructure and promote EVs effectively.