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Exempting Battery Electric Vehicles From Traffic Restrictions: Impacts On Market And Environment Under Pigovian Taxation, Xu Hu, Zhaojun Yang, Jun Sun, Yali Zhang

Information Systems Faculty Publications and Presentations

In busy metropolitan areas, traffic restrictions based on the last digits of license plates effectively ease traffic jams and improve air quality. Recently, policy-makers in China exempted battery electric vehicles (BEV) from traffic restrictions to promote their diffusion in place of conventional vehicles (CV). To examine the impacts of such an exemption on consumers and manufacturers as well as the environment, this study models the duopoly competition between BEV and CV manufacturers as a Cournot game. The numerical analyses compare three traffic restriction policies concerning BEV and CV, and reveal the pros and cons of each. In particular, the BEV-exempted …