The Chinese plug-in electric vehicles industry in post-COVID-19 era towards 2035: Where is the path to revival?

Abstract

The sudden Coronavirus Disease reported at the end of 2019 (COVID-19) has brought huge pressure to Chinese Plug-in Electric Vehicles (PEVs) industry which is bearing heavy burden under the decreasing fiscal subsidy. If the epidemic continues to rage as the worst case, analysis based on System Dynamics Model (SDM) indicates that the whole PEVs industry in China may shrink by half compared with its originally expected level in 2035. To emerge from the recession, feasible industrial policies include (1) accelerating the construction of charging infrastructures, (2) mitigating the downtrend of financial assistance and (3) providing more traffic privilege for drivers. Extending the deadline of fiscal subsidy by only 2 years, which has been adopted by the Chinese central government, is demonstrated to achieve remarkable effect for the revival of PEVs market. By contrast, the time when providing best charging service or most traffic privilege to get the PEVs industry back to normal needs to be advanced by 10 years or earlier. For industrial policy makers, actively implementing the other two promoting measures on the basis of existing monetary support may be a more efficient strategy for Chinese PEVs market to revive from the shadow in post-COVID-19 era.