Synergistic Impacts of China’s Subsidy Policy and New Energy Vehicle Credit Regulation on the Technological Development of Battery Electric Vehicles

Kangda Chen, Fuquan Zhao, Han Hao and Zongwei Liu
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Kangda Chen: State Key Laboratory of Automotive Safety and Energy, Tsinghua University, Beijing 100084, China
Fuquan Zhao: State Key Laboratory of Automotive Safety and Energy, Tsinghua University, Beijing 100084, China
Han Hao: State Key Laboratory of Automotive Safety and Energy, Tsinghua University, Beijing 100084, China
Zongwei Liu: State Key Laboratory of Automotive Safety and Energy, Tsinghua University, Beijing 100084, China

Energies, 2018, vol. 11, issue 11, 1-19

Abstract: With the phasing down of subsidies, China has launched the new energy vehicle (NEV) credit regulation to continuously promote the penetration of electric vehicles. The two policies will coexist through 2020 and definitely pose a dramatic impact on the development of the Chinese and even the global electric vehicle market. However, few studies have systematically investigated the relationship between the two policies as well as the synergistic impacts during the overlap period. This paper interprets the rationales of China’s subsidy policy and NEV credit regulation and establishes a bottom-up model to estimate the synergistic impacts of the two policies on the technological trends of battery electric vehicles (BEVs) from the perspective of credit cost-effectiveness. The results suggest that the subsidy policy still maintains strong support for the development of electric vehicles in China. For small BEVs whose driving ranges are higher than 300 km, subsidies even account for 40–50% of the manufacturing cost. In addition, we conclude that the two policies will complement each other in the transitional period and small BEVs are preferred by both policies. Under the NEV credit regulation, 350 km will consistently be the optimal driving range, which will definitely limit the development of other ranges. With the addition of the subsidy, the limitation will be amended in the short run. However, the effect of the subsidy is decreasing and is going to be canceled after 2020, so the focus should be on the optimization of the NEV credit regulation.

Keywords: battery electric vehicle; subsidy; new energy vehicle credit regulation; China; Synergistic impacts (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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