Setting up charging electric stations within residential communities in current China: Gaming of government agencies and property management companies

The difficulty of charging electric vehicles (EVs) is now hindering their further development. Governments generally choose to build stations for home charging (including piles) within residential communities. Given the conflict of interest between various government agencies and property management companies, constructing a charging station within residential communities would result in welfare loss for the property management companies and therefore lead to the principal-agent problem. This paper constructs a two-period imperfect information game theory model to study the moral hazard involved in this issue and government agencies׳ optimal choice. In the analytic solution of the model, we find that the optimal choice for a farsighted government agency is to constantly improve the incentive mechanism and introduce charging stations only when the conflict of interest is eliminated. Any benefits derived from government regulations by force would prove short-lived. The government should focus on long-term returns in the development of EVs, and its optimal mechanism should be designed to mitigate the principal-agent problem of property management companies, thereby accelerate the progress of EV charging infrastructure and improve overall social welfare.