Emerging Electric Vehicle Charging Market: Analyzing the Impact of Firm Pricing, Charging Speed, Consumer Preferences, and Power Tariff Subsidy

As the electric vehicle (EV) market expands, Charging Service Providers (CSPs) must decide whether to offer Alternating Current (AC) charging, which is slower and less costly, and/or Direct Current (DC) charging, which is faster but more expensive. Consumers differ in their valuation of charging speed, while AC and DC systems face distinct electricity tariffs and efficiency levels, resulting in different operating costs. Governments increasingly provide power-tariff subsidies to lower these costs and promote charging infrastructure. This study develops a Stackelberg framework in which the government acts as the leader maximizing social welfare, and the CSP acts as the follower maximizing profit underpricing and service constraints. We analytically characterize equilibrium outcomes for optimal pricing and service configurations under varying subsidy levels. The analysis identifies four market regimes: joint AC–DC offerings, exclusive AC or DC markets, and market exit. When no subsidy is provided, CSPs optimally withhold service; full support induces exclusive DC service, while intermediate support yields mixed outcomes depending on base tariffs and efficiency. Under certain parameter ranges, subsidies can induce a CSP to narrow rather than broaden its offerings. Extending the analysis to a duopoly shows that charging prices become inversely related to the efficiency of the competing technology, and demand responses to subsidies become non monotonic. The results provide actionable insights for designing coordinated subsidy and pricing strategies for sustainable EV charging ecosystems