Investigating the impact of government policies to develop sustainable transportation and promote electric cars, considering fossil fuel subsidies elimination: A case of Norway

[Display omitted] •Electric and fossil car pricing is discussed from a game theoretic point of view.•The role of the battery manufacturer as an important element in the electric vehicle supply chain was investigated.•The government used tax and subsidy policies to achieve its economic, social and environmental goals.•An integrated Shannon entropy and TOPSIS method was used to find the best government strategy.•The results of a case study in Norway are provided. This study examines the issue of electric and fossil car pricing in a 3-level supply chain including the government, Gasoline vehicle (GV) manufacturer, electric vehicle (EV) manufacturer and electric vehicle battery manufacturer, in which the manufacturers, in order to increase their profits, determine the price and take care the amount of improvement of their products And the government, as a leader, uses direct and indirect financial tools, including subsidies and car purchase taxes, fuel taxes and subsidies to battery manufacturers to cooperate in the research and development cost of battery production and reduce its price, in order to achieve various economic, social and environmental goals to make the transportation system sustainable. To reach the optimal solution of this problem, the approach of game theory and Stackelberg method has been used and the results have been obtained using the data of Norway. Examining the results provides a special approach to managers to make optimal decisions in different situations. In this matter, different scenarios have been considered according to the goals of the government and finally, using the TOPSIS method, the best decision has been introduced for the government. As a result, in order to attract more customers to buy EV and increase the range of electric cars and, to increase the profits of EV manufacturers and EV battery manufacturers, the government should give large subsidies to EV customers and, with the aim of reducing pollution and increasing its income, impose more taxes on fossil cars and fossil fuels.