A review of evolutionary policy incentives for sustainable development of electric vehicles in China: Strategic implications

Yang Andrew Wu, Artie W. Ng, Zichao Yu, Jie Huang, Ke Meng and Z.Y. Dong

Energy Policy, 2021, vol. 148, issue PB

Abstract: The Chinese government has introduced policy measures and financial incentives to promote electric vehicles (EVs) in alignment with its advanced industrial development and environmental sustainability. In order to stimulate market adoption and technological innovation, a dual-credits policy regime with strictly guided subsidies was first announced in 2017 and then tightened up in 2019 by relevant authorities of the central government. This study focuses on examining the latest development of EV policy in the Chinese mainland. It reviews the pertinent national-level policy measures and financial incentives for sustainable development of the EV industry in a macro scope over the past decade. Further, we develop a mathematical model to quantify the impact of the most update policy – the dual-credits policy regime. Our simulation results reveal a significant gap between the recent EV sales and the estimated future EV production needed under the new policy regime. Such significant gap implies remarkable policy pressure and inevitable execution challenges of the recently tightened dual-credits regime. In conclusion, we articulate strategic implications for EV market participants in China. Upcoming challenges including gradual phasing out of financial support and impending market competition are discussed.

Keywords: Electric vehicle; Sustainable development; Policy incentives; Financial subsidy; China (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:148:y:2021:i:pb:s0301421520306947

DOI: 10.1016/j.enpol.2020.111983

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