Development and Impacts of the Incentive Policies for Electric Vehicles in China

Abstract

Electric vehicles (EVs) are one of the key solutions for global energy transition. As the renewable energy’s share in energy consumption continues to grow, replacing traditional fuel vehicles with EVs can effectively contribute to energy saving, carbon emission reduction, air pollution control and energy security. Most of the developments in the EV markets across the world occurred in the past decade, a time when China becomes the biggest market and the biggest driver of global EV markets. Along the development of China’s EV market, which can be divided into three stages, incentive policies, both direct and indirect ones, have played a critical role. The primary direct incentive policy—EV purchase subsidies—has directly impacted the development of global EV markets. Since the purchase subsidies are going to be phased out, indirect incentive policies including building charging infrastructure should be improved in the short term; and more new policies, such as the dual-credit policy, and the policy of inter-sectoral integration, should be adopted in the long term to boost EV development in China.