An empirical study on the impact of tax incentives on the development of new energy vehicles: Case of China

Shaolong Zeng, Man Ji and Xinye Huang

Energy Policy, 2025, vol. 198, issue C

Abstract: As a substitute for traditional fuel vehicles, the new energy automobile industry has gradually come into the public's view in response to environmental protection requirements. China values the role of policy regulation in promoting the rapid growth of the new energy vehicle sector. This research uses data from A-share listed new energy automotive corporations from 2010 to 2022 and the two-way fixed effect model to investigate the influence of tax incentives on the development of new energy vehicles. The empirical results show that: (1) Tax incentives have a significant promotion effect on the performance of new energy automobile enterprises and have the most significant impact on their operational capacity; (2) Tax incentives can improve the performance of new energy automobile enterprises by alleviating financing constraints; (3) The incentive effect of tax incentives on the performance of new energy car firms is more substantial in the eastern region, but the effect on the central and western regions is unclear; (4) The tax incentives on the performance of new energy automobile enterprises. The promotion effect has long-term, sustained effects. Based on the foregoing conclusions, this paper gives policy recommendations on how to stimulate the development of new energy vehicles in terms of tax advantages.

Keywords: Tax incentives; New energy vehicle; Enterprise performance; Financial constraints; Government policy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:198:y:2025:i:c:s0301421524004725

DOI: 10.1016/j.enpol.2024.114452

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