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

Kangda Chen,Zongwei Liu,Han Hao,Fuquan Zhao

doi:10.3390/en11113193

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.

Highlights

With the boom of the vehicle market in the past decade, China is facing severe energy and environmental problems simultaneously [1,2,3]
With the phasing down of subsidies, China has launched the new energy vehicle (NEV) credit regulation to continuously promote the penetration of NEVs, where the two policies will coexist through 2020 or even longer and definitely pose a dramatic impact on the development of the Chinese and even the global electric vehicle market
This paper focuses on China’s subsidy policy and NEV credit regulation in the few years

Summary

Introduction

With the boom of the vehicle market in the past decade, China is facing severe energy and environmental problems simultaneously [1,2,3]. China has accounted for approximately 27.6% of global carbon dioxide emissions [5], and haze and particulate matter (PM) have become society-wide concerns [6]. As promising technologies for addressing oil security, air pollution, and greenhouse gas emissions, new energy vehicles (NEVs) have gained high priority in China and even worldwide [9]. Available online: https://www.arb.ca.gov/msprog/zevprog/zevregs/zevregs.htm (accessed on 18 September 2018). Tracking and Evaluation of Major New Energy Vehicle Market Policies in the World; China EV100

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Conclusion