An evaluation of government incentives for new energy vehicles in China focusing on vehicle purchasing restrictions

Shao-Chao Ma, Ying Fan and Lianyong Feng

Energy Policy, 2017, vol. 110, issue C, 609-618

Abstract: In order to reduce carbon emissions and urban smog, the Chinese government has instituted a number of policies to promote the diffusion of new energy vehicles (NEVs), achieving remarkable results. This paper aims to quantify the effectiveness of various policies. After reviewing and quantifying the policies directly related to the sales and driving of NEVs in the past five years, we established a multivariate co-integration model and an error correction model to analyse the long- and short-term effects of these policies. The results demonstrate positive co-integration for the relationship between the NEV market share and the NEV purchase subsidy, tax exemption, the policy of restricting internal combustion engine vehicle (ICEV) purchase, and the abolishment of traffic restrictions for NEVs. China's unique policy of restricting ICEVs has in fact promoted NEV sales by adjusting the supply and demand to influence the consumers' choices. Finally, we found technology to still be a bottleneck factor in the NEV industry, and technological progress's effect on NEV diffusion is greater than the economic subsidy policy. Therefore, this study suggests that the funds being made available from the gradual reduction of the purchase subsidy should be transferred to research and development.

Keywords: New energy vehicles; Policy evaluation; Vehicle purchasing restrictions on; Panel co-integration (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (84)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421517304895
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:110:y:2017:i:c:p:609-618

DOI: 10.1016/j.enpol.2017.07.057

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().