How to Choose the Refueling of New Energy Vehicles under Swapping Vs. Charging Mode: From the Consumers’ Perspective

Abstract

Background: Battery charging mode is a prevalent method of transshipping power to new energy vehicles. Unfortunately, due to the limited capacity of batteries, typical new energy vehicles can only travel for approximate 350 miles on a single charge and require hours to be recharged. Battery swapping mode, as a novel alternative, can offer ideal solutions by depleted batteries being exchanged for recharged ones at swapping stations in the middle of long trips, thus will inevitably influence potential consumers’ purchase behaviors accordingly.Methods: To examine the impact of swapping mode and charging mode on consumers’ purchase intention, this paper examines a duopolistic market consisting of two new energy vehicle makers (i.e., new energy vehicle maker with swapping mode and one with charging mode), who adopting swapping mode and charging mode to service consumers, respectively. Considering swapping mode characterized with low initial investment and ease of use for consumers, the new energy vehicle makers with charging mode, capitalize on battery extended warranty service in response to rivals’ utilization of swapping mode, thereby non-cooperative game models are formulated, in which government subsidies are taken into account, both the optimal production decision for the new energy vehicle maker with swapping mode maker and one with charging mode are analyzed under three scenarios: without extended warranty service, with extended warranty service, and with extended warranty service and subsidy.Results: The results show that two makers’ market dominance relies on the ratio of the swapping station’s convenience to the extended warranty service and the valuation incremental rate. Additionally, we also find that the government subsidy can dramatically improve the performance of the new energy vehicle maker with swapping mode at the initial stage, but if the subsidy is insufficient size at the sequent stage, this will lead to policy failure and inefficiency in propelling the diffusion of swapping mode.Conclusions: The emerging swapping mode technology is a promising innovative one in boosting new energy vehicle diffusion, which will supplement to charging mode, thus reduce climate change dramatically