Will an electric vehicle manufacturer benefit from sharing services through price leadership strategy and improving the driving range?

Abstract We investigate the incentives of an electric vehicle manufacturer (EVM) to improve the driving range of electric vehicles (EVs) following the entry of a third‐party business‐to‐consumer EV‐sharing platform (sharing platform). Particularly, we examine the two parties’ price leadership strategy and evaluate two scenarios: the EVM is unable (i.e., the short‐term scenario) and able (i.e., the long‐term scenario) to improve the driving range. In the short‐term scenario, the sharing platform (or EVM) should act as price leader if the hassle cost faced by the sharing platform is low (or high). Moreover, the EVM's profits are found to be lower in the short‐term scenario (with sharing services), compared to the case without such services. In the long‐term scenario, the EVM must always act as a price leader. Additionally, when faced with high hassle cost, a higher driving range should be established. Improving the driving range will increase the long‐term profitability of the EVM.