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Policy evolution and effect evaluation of new-energy vehicle industry in China

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  • Dong, Feng
  • Liu, Yajie

Abstract

As China is faced with the double dilemmas of environmental pollution and energy security, new-energy vehicles (NEVs) come with high expectations, which need to be guided by an “invisible hand”. To analyse the optimal functioning power of policies and determine the direction of future policy implementation, this paper utilizes the COPA framework (i.e., analysis from four dimensions of contents, outlook, power, and authorities) to analyse policy evolution in respect of the new-energy vehicle industry (NEVI). In addition, a quantitative table of policy power is designed to construct the policy effects in various periods. Furthermore, this paper employs threshold model and quantile regression model to explore the threshold effect of policy power on the policy implementation effects and the transformation of policy implementation effects at different development stages, respectively. The results are as follows. (1) The Chinese NEVI policy continues to attach importance to government-guided consumption and government-supported technical development, with the major issuing form still being “notices”. Although “moderate” industrial policies are adopted as the main policies, the issuance strength has been rising periodically, and the functioning strength has been maintaining a steady rise year by year. The non-definition of the competent authorities is one of the key factors that affect the development of the NEVI. (2) The policy power has a significant threshold effect on its functioning strength. When the policy strength exceeds the threshold value of 69, the effect of the policy will nearly double; thus, to promote the technological innovation of NEVs, it is necessary to formulate high-intensity policies. (3) The effect of industrial policy will differ greatly at different development stages. Along with the gradual formation of market orientation of the NEVI, the effect of industrial policies has weakened gradually. Properly reducing the subsidy of NEVs will achieve the optimal allocation of government resources.

Suggested Citation

  • Dong, Feng & Liu, Yajie, 2020. "Policy evolution and effect evaluation of new-energy vehicle industry in China," Resources Policy, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:jrpoli:v:67:y:2020:i:c:s0301420719302284
    DOI: 10.1016/j.resourpol.2020.101655
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