System Dynamics Modeling for China's EV Development Strategy

Due to mandatory emission reduction and rising oil prices electric vehicles are about to be introduced in mass markets. This paper presents a system dynamics model of Chinas development strategy of electric vehicle industry. The focus of the paper is to study the influence of four major dynamic factors government policies, technology innovation, market demand and competitive ability. It gives an overall scenario of the development and highlights the major problems faced by Chinese electric vehicles industry, and how SD modeling can be used for the analysis of the industry developing policy. The model has been used to simulate the influence of these dynamic factors for 20 years, and a serious of policy tests and some useful policy suggestions were put forward. The result suggested that government support will still play a key role in a long-term.