Incentive policy formulation for China's electric vehicle market: Navigating pathways to sustainable mobility with a green premium analytical model

Hang Fan, Zhi Li, Yunjie Duan and Boyu Wang

Energy Policy, 2025, vol. 202, issue C

Abstract: Accurate electric vehicle (EV) sales forecasting is essential for effective policy-making and sustainable industry growth. Existing approaches frequently overlook the green premium - the cost differential between conventional and zero-emission technologies - in EV adoption analyses. Thus, the objective of this research was to model the green premium in the green transition process of battery electric vehicle (BEV) and to guide the formulation of incentive policies to promote industry development. We use an improved Bass diffusion model and genetic algorithms to predict the market penetration rate of BEVs under different green premium scenarios, and we provide policy recommendations based on data from China's electric vehicle market. Our findings show that the market penetration rate of BEVs is highly sensitive to the green premium. Incentive policy subsidies and technological innovation are the main factors affecting the green premium of BEVs. Dual-credit policies and license plate restrictions increase the market penetration rate of BEVs by reducing their production and usage costs. Technological innovations, such as advancements in battery technology and improvements in intelligence levels, fundamentally reduce production costs and increase product premiums, which are key to the market entry and sustainable development of BEVs.

Keywords: Green premium; Electric vehicles; TCO; Incentive policy; Technological innovation; Sales forecast (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030142152500117X
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:202:y:2025:i:c:s030142152500117x

DOI: 10.1016/j.enpol.2025.114610

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 ().