Information Systems Faculty Publications and Presentations
Is it worth promoting battery swapping? A social welfare perspective on provider- and consumer-side incentives
In countries that promote further EV diffusion, battery swapping opens up a market outlet for time-sensitive consumers as well as another green policy channel. To better understand this phenomenon from the perspective of policy-making, this study establishes a Hotelling model of a competitive market comprising a battery swapping service provider and a charging service provider. The analyses of three scenarios, no subsidization, consumer subsidization, and provider subsidization, reveal how to maximize social welfare. Considering subsidy amount, consumer time preferences, service time, and operating costs, the findings provide valuable insights for policymakers. Whereas incentive programs are generally helpful for battery swapping development and social welfare improvement, it is more effective to subsidize service providers than end consumers. Considering subsidy opportunity cost, it is necessary to control incentive amount and make continuous adjustments to promote battery swapping services without harming charging services.
• The battery swap mode caters to time-sensitive consumers of electric vehicles.
• A Hotelling model comprises two service providers for battery swap and charging.
• Government subsidies to battery swap services increase overall social welfare.
• Provider subsidization is more market effective than consumer subsidization.
• Subsidy amount should be within a threshold not to compromise charging services.
Yang, Zhaojun, et al. "Is it worth promoting battery swapping? A social welfare perspective on provider-and consumer-side incentives." Journal of Environmental Management 330 (2023): 117157. https://doi.org/10.1016/j.jenvman.2022.117157
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Journal of Environmental Management
Available for download on Saturday, March 15, 2025
Original published version available at https://doi.org/10.1016/j.jenvman.2022.117157