Pricing the PHEV Considering CVs of the Same Model as PHEV

When original equipment manufacturers (OEM) introduced conventional vehicles (CVs) in the market and put plug-in hybrid electric vehicles (PHEV) into the market again, it faces another pricing decision. First of all, OEM needs to decide whether CVs should be repriced at the same time as PHEV is priced, or whether the original CVs pricing should be followed. OEM then needs to determine the specific retail price of each vehicle. In addressing this pricing issue, this paper takes into account the differences in consumer preferences for traffic privileges and environmental consciousness, and establishes a two-dimensional characteristics space. The study found that whether enterprises reprice CVs is related to the original retail price of CVs. At the same time, corporate profits are affected by a variety of policy factors. In particular, a moderately high purchase tax can improve corporate profits.