Abstract: In order to promote the construction of electric vehicle (EV) charging facilities effectively, and to find an efficient way to solve the current unbalance caused by high EV potential market-demand and the insufficient supply of charging facilities, it is necessary to explore the interaction mechanism between investment decision of charging facility operators and the development of EV. For this purpose, this paper firstly constructs an EV dynamic development model based on classic Bass model, which could reflect both the technological progress of EV and the supply improvement of charging facilities; then a dynamic investment decision model of charging facilities operators is formulated, whereby the marginal condition of charging facilities investment is analyzed further. Accordingly, the effectiveness of the existing incentive policies of EV charging facilities is also assessed. The main findings of this paper are as follows: the investors of charging facilities don’t have investment motivation when the marginal benefit of the investment can not reach the special critical value; especially in the initial period of EV development when the expected benefit of charging facilities investment is too far below the critical value to stimulate the investment motivation of the relevant investors; in order to motivate the investment in this stage, it is necessary to speculate some incentive policies; compared with the existing policies, it is found that subsidy based on the installed capacity of EV chargers is the most effective policy. At last, a simulation analysis is presented to demonstrate the main results of this paper.

Key words: electric vehicles, Bass model, EV charging facility, incentive policy