Does a New Electric Vehicle Manufacturer Have the Incentive for Battery Life Investment? A Study Based on the Game Framework

Abstract

Motivated by the electric vehicle battery life performance, we studied the optimal investment decision-making behaviour of duopoly automakers. Based on the framework of game theory, this paper explores the influence of various parameters in the static game and dynamic game on the results, in combination with consumers’ preference for the battery life of electric vehicles. In the static game, a smaller investment coefficient is more beneficial to a firm that adopts an investment strategy rather than a firm that does not. When the investment coefficient increases, the difference between the two manufacturers will become smaller. The change of parameters in the dynamic game system may lead to complex dynamic phenomena, and the system will experience period-doubling bifurcation and N-S bifurcation from a stable state into a chaotic state. It will also significantly impact the basins of attraction, which affect the decision-makers’ initial choice. Consequently, we can use the control method to return the unstable system to stability. Based on these findings, some management insights and suggestions are presented.

Keywords

• duopoly
• new energy vehicle
• game theory
• low carbon investment
• complex system