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Electric vehicles are expanding significantly in recent years. Policies have been critical in stimulating the growth of electric vehicle market. This paper focuses on subsidy policies for electric vehicle adoption in a horizontally differentiated goods market. Using a representative consumer model and assuming the duopoly firms compete in a Cournot fashion, we find that the optimal level of subsidies might not fall as a result of the decreasing production cost of electric vehicles. Instead, thedoi:10.3389/fenvs.2022.1019948 fatcat:xffrjgqfbnh4tfr4stwhykvfpu