A Study on the Evolution of Competition in China’s Auto Market Considering Market Capacity Constraints and a Game Payoff Matrix: Based on the Dual Credit Policy
Round 1
Reviewer 1 Report
Abstract: Line 2: Needs a noun following “…new promote energy vehicle” such as “sales”; to complete the sentence. Line 9: needs to be plural “credit revenues and credit costs”…
Introduction: starting on 3rd line: all footnote references need to be as superscripts. Third line from the bottom, insert “game theory-based strategy” (or something along those lines) rather than “game”.
Lit Review: Describe each author separately, rather than listing and separating by semicolon ;
Figure 1, enlarge text font size in far right boxes.
Model Background and Methodology: Line 4, should be “research objectives”.
Is vehicle market different from auto Market? If not, stay consistent with using one term “auto” and market in lower case. Also, replace through narrative “automarket” with “auto market”.
Model Analysis: Page 10, midway down, needs a “.” after “…and TrJ2>0 also after “in Table 5”, fix error on reference not found.
Paper discusses competition and inhibition; it would be good to see a few sentences of description of these two concepts.
Page 11, midway down page, there’s a font issue should be separated by a comma, “…H1, H2, H3.
Page 11, Table 7, near bottom in text; I don’t see row 7 (see third row from bottom).
After Eq 12, when “sgn” what is that acronym as it’s not in the narrative description.
Figure 3 – shouldn’t it be equilibrium point D in the figure title (not D2)?
Results and Discussion: I think the sections at the very least ranging from 6.1-6.3 should be moved to a section retitled “Data and Methodology”. Section 6.4 may comprise a “Discussion” but it’s not solely a discussion of the author’s results. The authors should summarize their results/findings with some discussion of their findings for this section.
Page 15. Fix error reference link.
Conclusion: Very good.
Overall comments: Article is interesting and very well-written, and the mathematical presentation, figures, tables and variable description (including equations) is superb. The paper still needs line numbers in the margins.
Author Response
Thank you for your instructive and valuable comments and suggestions on our manuscript. We have studied all these comments, and have tried our best to revise the manuscript based thereon. The point-to-point responses to your comments are listed below. For ease of reading, the authors’ responses are listed in red color. Changes are also shown in red in the revised manuscript.
Point 1: Abstract: Line 2: Needs a noun following “…new promote energy vehicle” such as “sales”; to complete the sentence. Line 9: needs to be plural “credit revenues and credit costs”…
Response 1：Thank you for your comment. We rewrote the abstract.
Details are shown in the section “Abstract”.
Point 2: Introduction: starting on 3rd line: all footnote references need to be as superscripts. Third line from the bottom, insert “game theory- based strategy” (or something along those lines) rather than “game”.
Response 2: Thank you for your comment. Based on the suggestion that “all footnote references need to be as superscripts”, we corrected the references in the revised manuscript.
Based on the suggestion of “’game theory- based strategy’(or something along those lines) rather than ’game’”, we have corrected this phrasing in the revised manuscript.
Details are shown in the “1. Introduction “of the revised manuscript.( line98-99,page2and line109-110,page2)
Point 3: Lit Review: Describe each author separately, rather than listing and separating by semicolon ;
Response 3：Thank you for your comment. We rewrote the literature review.
Details are shown in the Section “2. Literature review “of the revised manuscript.
Point 4: Figure 1, enlarge text font size in far right boxes.
Response 4：Thank you for your comment. We have corrected the Figure 1.
Figure 1. Carry-over and trading framework of the dual credit policy
Details are shown in Figure 1 of the revised manuscript.( line 145 ,page3)
Point 5: Model Background and Methodology: Line 4, should be “research objectives”.
Response 5：Thank you for your comment. We have corrected it in the revised manuscript.
Details are shown in line 371,page4 of the revised manuscript.
Point 6: Model Background and Methodology: Is vehicle market different from auto Market? If not, stay consistent with using one term “auto” and market in lower case. Also, replace through narrative “automarket” with “auto market”.
Response 6: Thank you for your comment. We have made the appropriate corrections in the revised manuscript.
Details are shown in Sections 4.1, 4.2.2, and 5.2.1. of the revised manuscript.
Point 7: Model Analysis: Page 10, midway down, needs a “.” after “…and TrJ2>0 also after “in Table 5”, fix error on reference not found.
Response 7：Thank you for your comment. We have corrected it in the revised manuscript.
Details are shown in the paragraph above table 5 of the revised manuscript.
Point 8: Model Analysis:Paper discusses competition and inhibition; it would be good to see a few sentences of description of these two concepts.
Response 8：Thank you for your comments. Our article focuses on the market competition relationship between new energy vehicles and conventional fuel vehicles. In the competition relationship, one party will inhibit the other. In the revised manuscript, we corrected “the relationship between competition and inhibition” to “the relationship of competition”, and added the concept of competition
These two types of automakers generate competition relationships in the market, which are similar to population competition. The growth of either party will further compress the potential growth space of the other party and affect the development speed of the other party. When individuals of two different species share limited resources in the same area, interspecific competition may occur and inhibit the development speed of each other.
Details are shown in “Section 5.2.1. Competition density game model equilibrium point analysis” of the revised manuscript.
Point 9: Model Analysis: Page 11, midway down page, there’s a font issue should be separated by a comma, “…H1, H2, H3.
Response 9：Thank you for your comment. We have corrected it in the revised manuscript.
Setting 8.5and ,the simulation result graph of automakers' strategy evolution under the initial phase was obtained.
Details are shown in the following paragraph in Figure 5 of the revised manuscript.
Point 10: Model Analysis:Page 11, Table 7, near bottom in text; I don’t see row 7 (see third row from bottom).
Response 10：Thank you for your comment. We have corrected it in the revised manuscript, and other parts with the same problem also have been corrected.
Table 4. Stability solutions for parameter changes in the game model
|
Equilibrium Point |
Parameter Constraint 1： |
Parameter Constraint 2： |
|
||||||||
|
T |
Stability |
T |
Stability |
||||||||
|
O（0，0） |
Instability |
ESS |
|||||||||
|
（0，1） |
Instability |
Instability |
|||||||||
|
（1，0） |
Instability |
Instability |
|||||||||
|
（1，1） |
ESS |
Instability |
|||||||||
|
— |
— |
— |
— |
— |
— |
||||||
|
Evolutionary phase diagram |
|||||||||||
|
Equilibrium Point |
Parameter Constraint 3： |
Parameter Constraint 4： |
|||||||||
|
T |
Stability |
T |
Stability |
||||||||
|
O（0，0） |
ESS |
Instability |
|||||||||
|
（0，1） |
Saddle Point |
Saddle Point |
|||||||||
|
（1，0） |
N |
Saddle Point |
N |
Saddle Point |
|||||||
|
（1，1） |
N |
Saddle Point |
N |
Saddle Point |
|||||||
|
— |
— |
— |
— |
— |
— |
||||||
|
Evolutionary phase diagram |
— |
||||||||||
Equation (14) shows the relationship between the system stability point and the game payment matrix, where are the market holdings of NEVs and CFVs at the stabilization point, respectively. To reveal some of the key parameters involved in the game payment matrix and the impact on the stability point of the competitive system, in this paper are used as parameters to find its corresponding partial derivative of Equation (14) and to obtain formulas ,,,,,,and.
Details are shown in the paragraph above Table 7 of the revised manuscript, and Table 4 of the revised manuscript.
Point 11: Model Analysis:After Eq 12, when “sgn” what is that acronym as it’s not in the narrative description.
Response 11：Thank you for your comment. We have added the description of the “sgn” in the revised manuscript. 。
Details are shown in the footnote in Table 6 of the revised manuscript.
Point 12: Model Analysis:Figure 3 – shouldn’t it be equilibrium point D in the figure title (not D2)?
Response 12：Thank you for your comment. Figure 3 should be equilibrium point D in the figure title. We have corrected it in the revised manuscript, and we also corrected the Figure 3.
Figure 3. Phase diagram of equilibrium point
Details are shown in the Figure 3. of the revised manuscript.(page10)
Point 13:Results and Discussion: I think the sections at the very least ranging from 6.1-6.3 should be moved to a section retitled “Data and Methodology”. Section 6.4 may comprise a “Discussion” but it’s not solely a discussion of the author’s results. The authors should summarize their results/findings with some discussion of their findings for this section.
Response 13: Thank you for your comments. We adjusted the structure of the article and divided Sections 6.1 and 6.2 into separate sections named "6. Data and Methodology". Since Section 6.3 presents the simulation results of the evolutionary game model, Sections 6.3 and 6.4 were merged into "7. Simulation Result ". Section 6.3 was merged into Section "7.1. Simulation analysis of the evolutionary game model". We added more details to the discussion in Sections 7.2.1-7.2.3.
Details are shown in Sections 7.2.1-7.2.3 of the revised manuscript.
Point 14:Page 15. Fix error reference link.
Response 14：Thank you for your comment. We have fixed the error inks to references
Details are shown in the “References “on page 17.
Point 14:Conclusion: Very good.
Overall comments: Article is interesting and very well-written, and the mathematical presentation, figures, tables and variable description (including equations) is superb. The paper still needs line numbers in the margins.
We deeply hope that our revised paper could meet your requirements. We have added line numbers in the revised manuscript. Thank you very much for your careful consideration.
Author Response File: 
Author Response.docx
Reviewer 2 Report
Dear Editor,
I would like to appreciate the authors and editors for the opportunity to read the paper. The paper deals with an interesting topic and has the potential to offer new theoretical and methodological insights. However, there are some aspects which need to be further clarified and revised to make it suitable for publication. I hope the comments that provided below might help the author(s) to improve the quality of their manuscript.
1- The author(s) should carefully read their manuscript for grammatical errors and use more neutral language, there are an example of inconsistencies and typos throughout the manuscript. They need to ensure that the paper has been professionally edited and proofread before submission.
2- The background of new energy vehicles can be emphasized from the current situation of environmental pollution and low carbon goals, and then lead to problems that need to be solved. Also, the main argument and possible conclusions are not pointed in introduction. The main objectives of the paper should be pointed and why this topic is chosen must be discussed. I can give the author some references as sample:
Optimal channel strategy for obtaining new energy vehicle credits under dual credit policy: Purchase, self-produce, or both?
Energy carbon emission reduction of China's transportation sector: an input–output approach
The role of governmental policy in game between traditional fuel and new energy vehicles
3- Methods seem fine to me. However, the author(s) need to deep and systematic analysis about the results should highlight the novelty of this manuscript. Also, this part can be improved by comparing the study findings with previous studies.
4- Conclusions of the study should be improved, where it is necessary to suggest the real policy recommendations and constructive solutions for the possible problems which were found.
5- Include limitations and further research.
6- Kindly follow the right style of citation (references) throughout the manuscript by checking the guidelines of (sustainability) journal or any previously published paper in the journal.
Careful proofreading is needed throughout the whole paper.
Author Response
Response to the Comments of Reviewer 2
I would like to appreciate the authors and editors for the opportunity to read the paper. The paper deals with an interesting topic and has the potential to offer new theoretical and methodological insights. However, there are some aspects which need to be further clarified and revised to make it suitable for publication. I hope the comments that provided below might help the author(s) to improve the quality of their manuscript.
Thank you for your instructive and valuable comments and suggestions on our manuscript. We have studied all these comments, and have tried our best to revise the manuscript based thereon. The point-to-point responses to your comments are listed below. For ease of reading, the authors’ responses are listed in red color. Changes are also shown in red in the revised manuscript.
Point 1:The author(s) should carefully read their manuscript for grammatical errors and use more neutral language, there are an example of inconsistencies and typos throughout the manuscript. They need to ensure that the paper has been professionally edited and proofread before submission.
Response 1：Thank you for your comments. We have entrusted professionals to help improve the language of the paper. We performed a second round of proofreading on the manuscript.
Point 2:The background of new energy vehicles can be emphasized from the current situation of environmental pollution and low carbon goals, and then lead to problems that need to be solved. Also, the main argument and possible conclusions are not pointed in introduction. The main objectives of the paper should be pointed and why this topic is chosen must be discussed. I can give the author some references as sample:
Optimal channel strategy for obtaining new energy vehicle credits under dual credit policy: Purchase, self-produce, or both?
Energy carbon emission reduction of China's transportation sector: an input–output approach
The role of governmental policy in game between traditional fuel and new energy vehicles
Response 2：Thank you for your comments. In the first paragraph of the introduction, we added further details on the back-ground of the paper in terms of environmental pollution and low-carbon goals, and in the fourth and fifth para-graphs, we clarified the main goals of the paper and discussed the theme of the paper. We also fully cited the following three articles in the Introduction.
5 Yu Y, Li S, Sun H, et al. Energy carbon emission reduction of China’s transportation sector: an input–output approach[J]. Economic Analysis and Policy, 2021, 69: 378-393.
6 Li J, Ku Y, Li L, et al. Optimal channel strategy for obtaining new energy vehicle credits under dual credit policy: Purchase, self-produce, or both?[J]. Journal of Cleaner Production, 2022, 342: 130852.
9 Liao H, Peng S, Li L, et al. The role of governmental policy in game between traditional fuel and new energy vehicles[J]. Computers & Industrial Engineering, 2022: 108292.
Details are shown in Section “1. Introduction”.
Point 3: Methods seem fine to me. However, the author(s) need to deep and systematic analysis about the results should highlight the novelty of this manuscript. Also, this part can be improved by comparing the study findings with previous studies.
Response 3：Thank you for your comment. We supplement the relevant discussion in the Results section of 7.2 and compare the findings with previous studies after discussing the content.
Details are shown in the Section “7.2. Simulation analysis of the competition density game model”
Point 4: Conclusions of the study should be improved, where it is necessary to suggest the real policy recommendations and constructive solutions for the possible problems which were found.
Response 4: Thank you for your comment. We added policy recommendations and constructive solutions to our conclusions.
Policy suggestions: (1) It is necessary for the government to form a reasonable transaction price for credits, establish a regulatory mechanism for the credit trading market, guarantee the price of credits, and reduce the risk of imbalance between credit supply and demand. (2) The design of the government's fuel economy standards needs to study the response behavior of enterprises comprehensively and in depth, strengthen the guidance to improve the fuel consumption of conventional fuel vehicles, introduce policies to support and encourage low fuel consumption vehicles, accelerate the reduction in the fuel consumption of conventional fuel vehicles, and ease the industry's dual credit compliance pressure. (3) It is necessary for the government to keep the credit price at an appropriate level, actively explore credit pools and price guidance measures, issue a point-guided price mechanism, strengthen the supervision of credit trading platforms, reduce credit price fluctuations, and regulate point price ceilings. (4) Additionally, it is necessary for the government to guide the establishment of a benign credit supply and demand guidance mechanism in the market, increase the adjustment mechanism of the credit trading market, stabilize the credit price and credit value, consider the actual situation of different types of automakers in the market, and set different calculations for the rules for different types of automakers.
Details are shown in the last three paragraphs of Section “8. Conclusions”.
Point 5: Include limitations and further research.
Response 5：Thank you for your comment. We have added this content in the revised manuscript.
Limitations: (1) The calculation rules of the dual credit policy are simplified in our model. Thus, a more detailed portrayal may help subsequent studies to more accurately evaluate the effectiveness of the dual credit policy in promoting NEVs in China. (2) In reality, there are still many factors that can affect the production decision-making behavior of automakers.
Future research: (1) Future research will complicate the calculation rules of the dual credit policy and will consider the situation in which automakers retain some remaining credits to deal with market uncertainties. (2) Future research will complicate the payment matrix, adding the impact of consumer choice on the evolution of the Chinese auto market.
Details are shown in the last two paragraphs of the Section “8. Conclusions”
Point 6: Kindly follow the right style of citation (references) throughout the manuscript by checking the guidelines of (sustainability) journal or any previously published paper in the journal.
Response 6：Thank you for your comment. We have fixed the error inks to references
详细信息显示在“参考资料”一节中。
整篇论文都需要仔细校对。
我们深切希望我们修订后的文件能够满足您的要求。非常感谢您的认真考虑。
Author Response File: Author Response.docx
Reviewer 3 Report
This paper studied the evolution of commetition in China's auto market considering market capacity constraints and a game payoff matrix. The research can provide effective technical and theoretical support to promote the sustainable development of the Chinese automotive industry. However, several details need attention.
1. This paper considers only the case where an automaker produces CFVs, generates negative CAFC credits, and needs to purchase NEV credits to compensate. Please give more explanation.
2. There are errors in equation number, please check.
3. There are errors in section 5.2.1 and section 6.3 that Reference sources not found.
4. Please explain the contents of abscissa and ordinate of figure 5
5. Please provide the shortcomings of this study and the prospects for future research
The recommendation is to resubmit the manuscript after minor revisions.
Author Response
Response to the Comments of Reviewer 3
This paper studied the evolution of commetition in China's auto market considering market capacity constraints and a game payoff matrix. The research can provide effective technical and theoretical support to promote the sustainable development of the Chinese automotive industry. However, several details need attention.
Thank you for your instructive and valuable comments and suggestions on our manuscript. We have studied all these comments, and have tried our best to revise the manuscript based thereon. The point-to-point responses to your comments are listed below. For ease of reading, the authors’ responses are listed in red color. Changes are also shown in red in the revised manuscript.
Point 1: This paper considers only the case where an automaker produces CFVs, generates negative CAFC credits, and needs to purchase NEV credits to compensate. Please give more explanation.
Response 1: Thank you for your comments. We think that what you point out is a very good problem and that is also and the challenge of this paper. The dual credit policy is for managing corporate average fuel consumption (CAFC) and new energy vehicle (NEV) credits for passenger vehicles. In this policy, CFV makers are required to meet both the mandatory CAFC credits and NEV credits over a planning horizon before being permitted to manufacture CFVs. If either the amount of CAFC credits or that of NEV credit is deficient, CFV makers must offset the credit shortfall by self-generating, purchasing externally or other taking other measures. Otherwise, producing CFVs will not be allowed[32]. On the other hand, according to the Ministry of Industry and Information Technology (MIIT) and the "Average Fuel Consumption of Chinese Passenger Vehicle Manufacturers and New Energy Vehicle Credit Accounting Table"[44-45] that it issued, among the more than 100 automakers included, none of those producing only CFVs met the fuel consumption target set by the government. If automakers want to produce conventional fuel vehicles, they must purchase a certain amount of new energy vehicle credits to produce them. Therefore, this paper focuses on the case where an automaker produces CFVs, generates negative CAFC credits, and needs to purchase NEV credits to compensate.
32 Wang Z, Zhang J, Zhao H. The selection of green technology innovations under dual-credit policy[J]. Sustainability, 2020, 12(16): 6343.
44 MIIT (Ministry of Industry and Information Technology). Announcement on the Corporate Average Fuel Consumption and New Energy Vehicles Credits of Passenger Vehicle Companies in 2019. 2020. Available online: https://www.miit.gov.cn/xwdt/gxdt/sjdt/art/2020/art_de5c8433fad54cd89c7ae2be2aa5e76c.html (accessed on 22 June 2020).
45 MIIT (Ministry of Industry and Information Technology). Announcement of Average Fuel Consumption and New Energy Vehicle Credits of Chinese Passenger Vehicle Enterprises in 2020. 2021. Available onlinehttps://www.miit.gov.cn/jgsj/zbys/wjfb/art/2021/art_69ba8336123a4a3ba96a20771c494c08.html (accessed on 15 July 2021).
We have added a relevant explanation of the issue in the revised manuscript.
Details are shown in Section “3. Model Backgrounds”and Section” 4.1. Automakers' production decision game model construction”.
Point 2: There are errors in equation number, please check.
Response 2：Thank you for your comment. We have corrected it in the revised manuscript.
Details are shown in line 571,page 7 of the Section 5.1. Game model stability analysis, and line 619-634,page 9 of the Section 5.2.1. Competition density game model equilibrium point analysis.
Point 3: There are errors in section 5.2.1 and section 6.3 that Reference sources not found.
Response 3：Thank you for your comment. We have corrected it in the revised manuscript.
Details are shown in the Section 5.2.1and the Section 7.1.1 of the revised manuscript. ( line 603 ,page8 ;line 637 ,page9; line778,page12)
Point 4: Please explain the contents of abscissa and ordinate of figure 5
Response 4：Thank you for your comment. We have added the content in the revised manuscript.
According to the initial values in Table 8, the simulation result graph of automakers' strategy evolution under the ideal phase was obtained, as shown in Figure 5(a),where abscissa “q” represents the probability that automaker 2 chooses the NEV production strategy and ordi-nate “g” indicates the probability that automaker 1 chooses the NEV production strategy.
Details are shown in the Section 7.1.1.(line 769-771.page13)
Point 5: Please provide the shortcomings of this study and the prospects for future research
Response 5：Thank you for your comment. We have added the content in the revised manuscript.
Limitations: (1) The calculation rules of the dual credit policy are simplified in our model. Thus, a more detailed portrayal may help subsequent studies to more accurately evaluate the effectiveness of the dual credit policy in promoting NEVs in China. (2) In reality, there are still many factors that can affect the production decision-making behavior of automakers.
未来的研究：（1）未来的研究将使双积分政策的计算规则复杂化，并将考虑汽车制造商保留部分剩余信用以应对市场不确定性的情况。（2）未来的研究将使支付矩阵复杂化，增加消费者选择对中国汽车市场演变的影响。
详情见“8.结论”
我们深切希望我们修订后的文件能够满足您的要求。非常感谢您的认真考虑。
Author Response File: Author Response.docx
Reviewer 4 Report
Abstract: Suggest to rewrite to avoid mentioning same or similar point more than once. For instance, point on using "actual data".
Reference to previous studies: the in text citation does not seem to be formatted as per the guidelines. In page, 15, it reads: Error! Reference not found.
The conclusions, and the abstract, should include a discussion of the magnitude of effects rather than just mentioning whether the factors considered are important or not. There should also be more weightage given to the discussion of the limitation and robustness of the analysis.
Author Response
Thank you for your instructive and valuable comments and suggestions on our manuscript. We have studied all these comments, and have tried our best to revise the manuscript based thereon. The point-to-point responses to your comments are listed below. For ease of reading, the authors’ responses are listed in red color. Changes are also shown in red in the revised manuscript.
Point 1: Abstract: Suggest to rewrite to avoid mentioning same or similar point more than once. For instance, point on using "actual data".
Response 1: Thank you for your comment. We have rewritten the abstract to avoid repeating the same or similar points.
Abstract:The dual credit policy is currently the main starting point for China to achieve the green and sustain-able development of the auto market. However, the policy’s impact on future market development remains un-clear. It is necessary to consider the market capacity constraints and the market competition environment. By researching the impact of the dual credit policy on the micro-decision-making of automakers and the long-term evolution of the macro-auto market, the effect of the dual credit policy on the Chinese auto industry is obtained. This paper considers the market capacity constraint, combines the competitive relationship and game payment matrix between NEV makers and CFV makers, constructs a game model of the competition density between NEVs and CFVs, simulates the development and evolution of China's auto market size, and analyzes the effect of the quantitative parameters of the dual credit policy on the auto market. The results show that (1) the increase in NEV makers’ sale of credits will stimulate their production incentives, and the increase in conventional fuel vehicle (CFV) makers’ cost of purchasing credits will reduce their production incentives. (2) Tightened fuel con-sumption standards for CFVs have an enhanced stimulating effect on the increase in the market share of NEVs, which can effectively reduce the market share of CFVs. (3) The price of credits facilitates the growth of the NEV market share, but credit prices that are too high do not stimulate the growth of the NEV market share to a sig-nificant degree. (4) The increase in the proportion of credits required for NEVs and the increase in the price of credits together help to reduce the market share of CFVs and increase the market share of NEVs.
Point 2: Reference to previous studies: the in text citation does not seem to be formatted as per the guidelines. In page, 15, it reads: Error! Reference not found.
Response 2：Thank you for your comment. We have corrected it in the revised manuscript.
Details are shown in the “References “on page 17.
Point 3: The conclusions, and the abstract, should include a discussion of the magnitude of effects rather than just mentioning whether the factors considered are important or not. There should also be more weightage given to the discussion of the limitation and robustness of the analysis.
Response 3：Thank you for your comment. We rewrote the conclusion and abstract, and supplemented the limitations of the analysis in the conclusion part. There are some doubts about the “robustness of the analysis”, and we tried to compared with previous studies, supplement the proof materials.
Conclusions
Utilizing density game theory, in this article we explore how the dual credit policy affects the evolution of the auto industry by influencing micro mechanisms such as game strategies among automakers in the context of the conventional and advanced dynamics of the Chinese auto industry under the dual credit policy. Based on actual industry data, the current policy system, and the market situation, the development and evolution of China's auto market size are derived through simulation, and the impact mechanism of the quantitative parameters of the dual credit policy on the auto market is analyzed. The main conclusions are as follows:
(1)The increase in the income of new energy vehicle companies from selling credits will stimulate their enthusiasm for production, while the increase in the cost of purchasing credits for conventional fuel vehicle companies will reduce their enthusiasm for production. The reason is that under the dual credit policy, the profit of automakers depends on two components: the profit from vehicle production and sales and the additional income or cost of point transactions. Fluctuations in credit sales revenue or credit purchase costs will have an impact on the total profit of automakers, and the total profit from the production of vehicles will ultimately affect the scale of automakers’ production of vehicles.
(2)The tightened fuel consumption standards for conventional fuel vehicles will have a stronger stimulating effect on the increase in the market share of new energy vehicles, which can effectively reduce the market share of conventional fuel vehicles. Because the reduction of fuel consumption of conventional fuel vehicles requires more innovation costs, strict standards will help automakers give priority to the production of new energy vehicles or improve fuel economy.
(3)The price of credits facilitates the growth of the NEV market share, but credit prices that are too high do not stimulate the growth of the NEV market share to a significant degree.At the same time, the continuous increase in the price of credits can accelerate the decline in the market share of conventional fuel vehicles.
(4) The increase in the proportion of credits required for new energy vehicles and the increase in the price of credits together help to reduce the market share of the conventional fuel vehicles and increase the market share of new energy vehicles.
Policy suggestions: (1) It is necessary for the government to form a reasonable transaction price for credits, establish a regulatory mechanism for the credit trading market, guarantee the price of credits, and reduce the risk of imbalance between credit supply and demand. (2) The design of the government's fuel economy standards needs to study the response behavior of enterprises comprehensively and in depth, strengthen the guidance to improve the fuel consumption of conventional fuel vehicles, introduce policies to support and encourage low fuel consumption vehicles, accelerate the reduction in the fuel consumption of conventional fuel vehicles, and ease the industry's dual credit compliance pressure. (3) It is necessary for the government to keep the credit price at an appropriate level, actively explore credit pools and price guidance measures, issue a point-guided price mechanism, strengthen the supervision of credit trading platforms, reduce credit price fluctuations, and regulate point price ceilings. (4) Additionally, it is necessary for the government to guide the establishment of a benign credit supply and demand guidance mechanism in the market, increase the adjustment mechanism of the credit trading market, stabilize the credit price and point value, consider the actual situation of different types of automakers in the market, and set different calculations for the rules for different types of automakers.
Limitations: (1) The calculation rules of the dual credit policy are simplified in our model. Thus, a more detailed portrayal may help subsequent studies to more accurately evaluate the effectiveness of the dual credit policy in promoting NEVs in China. (2) In reality, there are still many factors that can affect the production decision-making behavior of automakers.
未来的研究：（1）未来的研究将使双积分政策的计算规则复杂化，并将考虑汽车制造商保留部分剩余信用以应对市场不确定性的情况。（2）未来的研究将使支付矩阵复杂化，增加消费者选择对中国汽车市场演变的影响。
详情见第8节。结论“和”7.2.竞争密度博弈模型的仿真分析”。
我们深切希望我们修订后的文件能够满足您的要求。非常感谢您的认真考虑。
Author Response File: Author Response.docx
Round 2
Reviewer 3 Report
Thank you for addressing all the comments for improvement. I am satisfied with the revised manuscript.
The sequence number of the fourth conclusion in Section 8.1 should be (4) instead of (54).
Author Response
Thank you for addressing all the comments for improvement. I am satisfied with the revised manuscript.
Thank you for your instructive and valuable comments and suggestions on our manuscript. We have studied all these comments, and have tried our best to revise the manuscript based thereon. The point-to-point responses to your comments are listed below. For ease of reading, the authors’ responses are listed in red color. Changes are also shown in red in the revised manuscript.
Point 1: The sequence number of the fourth conclusion in Section 8.1 should be (4) instead of (54).
Response 1：Thank you for your comment. We have corrected in the revised manuscript.
The main conclusions are as follows:
(1)The increase in the income of new energy vehicle companies from selling credits will stimulate their enthusiasm for production, while the increase in the cost of purchasing credits for conventional fuel vehicle companies will reduce their enthusiasm for production. The reason is that under the dual credit policy, the profit of automakers depends on two components: the profit from vehicle production and sales and the additional income or cost of point transactions. Fluctuations in credit sales revenue or credit purchase costs will have an impact on the total profit of automakers, and the total profit from the production of vehicles will ultimately affect the scale of automakers’ production of vehicles.(2)The tightened fuel consumption standards for conventional fuel vehicles will have a stronger stimulating effect on the increase in the market share of new energy vehicles, which can effectively reduce the market share of conventional fuel vehicles. Because the reduction of fuel con-sumption of conventional fuel vehicles requires more innovation costs, strict standards will help automakers give priority to the production of new energy vehicles or improve fuel economy.(3)The price of credits facilitates the growth of the NEV market share, but credit prices that are too high do not stimulate the growth of the NEV market share to a significant degree.At the same time, the continuous increase in the price of credits can accelerate the decline in the market share of conventional fuel vehicles.(4) The increase in the proportion of credits required for new energy vehicles and the increase in the price of credits together help to reduce the market share of the conventional fuel vehicles and increase the market share of new energy vehicles.
Details are shown in the last two paragraphs of the Section “8. Conclusions”
We deeply hope that our revised paper could meet your requirements. Thank you very much for your careful consideration.
