IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v190y2024ics0965856424002830.html
   My bibliography  Save this article

Policy incentives and electric vehicle adoption in China: From a perspective of policy mixes

Author

Listed:
  • Zhao, Xiaolei
  • Li, Xuemei
  • Jiao, Dehan
  • Mao, Yumeng
  • Sun, Jingxiao
  • Liu, Guanyi

Abstract

China has emerged as a global leader in electric vehicle (EV) sales due to the government’s industrial incentive policies. However, as industrial and incentive policies undergo adjustments and the market scales up, the efficacy of mixed incentive policies in a mature market becomes increasingly relevant compared to individual policies. Drawing on comprehensive year-panel data from 275 Chinese cities during 2016 ∼ 2022, this study estimates the average, complementary, and mixed effects of EV incentive policies. Our estimates indicate a limited incentive effect of purchase subsidy policies, signaling the need for a phased withdrawal of such incentives while exploring cost-effective alternatives. Furthermore, our study highlights the intricate relationship between policy diversity and overall effectiveness, emphasizing the potential crowding-out effects observed when multiple policies are concurrently implemented in cities. The effect of policy mixes is different among cities with different sales level, income level and population density. The effect of policy mixes is better in cities with a higher sales level, an upper middle-income level, and a medium population density. These insights offer a nuanced understanding of the evolving landscape of EV incentives, providing valuable guidance for policymakers navigating the complexities of incentive strategies in a maturing EV market.

Suggested Citation

  • Zhao, Xiaolei & Li, Xuemei & Jiao, Dehan & Mao, Yumeng & Sun, Jingxiao & Liu, Guanyi, 2024. "Policy incentives and electric vehicle adoption in China: From a perspective of policy mixes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 190(C).
  • Handle: RePEc:eee:transa:v:190:y:2024:i:c:s0965856424002830
    DOI: 10.1016/j.tra.2024.104235
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856424002830
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.tra.2024.104235?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Liu, Yiran & Zhao, Xiaolei & Lu, Dan & Li, Xiaomin, 2023. "Impact of policy incentives on the adoption of electric vehicle in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    2. Alali, Layla & Niesten, Eva & Gagliardi, Dimitri, 2022. "The impact of UK financial incentives on the adoption of electric fleets: The moderation effect of GDP change," Transportation Research Part A: Policy and Practice, Elsevier, vol. 161(C), pages 200-220.
    3. Zhao, Xiaolei & Zhao, Ziyao & Mao, Yumeng & Li, Xuemei, 2024. "The role of air pollution in electric vehicle adoption: Evidence from China," Transport Policy, Elsevier, vol. 154(C), pages 26-39.
    4. David Powell, 2020. "Quantile Treatment Effects in the Presence of Covariates," The Review of Economics and Statistics, MIT Press, vol. 102(5), pages 994-1005, December.
    5. Li, Guodong & Walls, W.D. & Zheng, Xiaoli, 2023. "Differential license plate pricing and electric vehicle adoption in Shanghai, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 172(C).
    6. Langbroek, Joram H.M. & Franklin, Joel P. & Susilo, Yusak O., 2016. "The effect of policy incentives on electric vehicle adoption," Energy Policy, Elsevier, vol. 94(C), pages 94-103.
    7. Kong, Deyang & Xia, Quhong & Xue, Yixi & Zhao, Xin, 2020. "Effects of multi policies on electric vehicle diffusion under subsidy policy abolishment in China: A multi-actor perspective," Applied Energy, Elsevier, vol. 266(C).
    8. Gonzalo, Jesus & Wolf, Michael, 2005. "Subsampling inference in threshold autoregressive models," Journal of Econometrics, Elsevier, vol. 127(2), pages 201-224, August.
    9. Lieven, Theo, 2015. "Policy measures to promote electric mobility – A global perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 78-93.
    10. Rogge, Karoline S. & Reichardt, Kristin, 2016. "Policy mixes for sustainability transitions: An extended concept and framework for analysis," Research Policy, Elsevier, vol. 45(8), pages 1620-1635.
    11. Buket Avci & Karan Girotra & Serguei Netessine, 2015. "Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact," Management Science, INFORMS, vol. 61(4), pages 772-794, April.
    12. Egnér, Filippa & Trosvik, Lina, 2018. "Electric vehicle adoption in Sweden and the impact of local policy instruments," Energy Policy, Elsevier, vol. 121(C), pages 584-596.
    13. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    14. Qiu, Y.Q. & Zhou, P. & Sun, H.C., 2019. "Assessing the effectiveness of city-level electric vehicle policies in China," Energy Policy, Elsevier, vol. 130(C), pages 22-31.
    15. Li, Lixu & Wang, Zhiqiang & Xie, Xiaoqing, 2022. "From government to market? A discrete choice analysis of policy instruments for electric vehicle adoption," Transportation Research Part A: Policy and Practice, Elsevier, vol. 160(C), pages 143-159.
    16. Gao, Jiong & Ma, Shoufeng & Zou, Hongyang & Du, Huibin, 2023. "How does population agglomeration influence the adoption of new energy vehicles? Evidence from 290 cities in China," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    17. Almeida Neves, Sónia & Cardoso Marques, António & Alberto Fuinhas, José, 2019. "Technological progress and other factors behind the adoption of electric vehicles: Empirical evidence for EU countries," Research in Transportation Economics, Elsevier, vol. 74(C), pages 28-39.
    18. Guerzoni, Marco & Raiteri, Emilio, 2015. "Demand-side vs. supply-side technology policies: Hidden treatment and new empirical evidence on the policy mix," Research Policy, Elsevier, vol. 44(3), pages 726-747.
    19. Guo, Taolei & Liu, Pei & Wang, Chao & Xie, Jingci & Du, Jianbang & Lim, Ming K., 2023. "Toward sustainable port-hinterland transportation: A holistic approach to design modal shift policy mixes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 174(C).
    20. Zhang, Xian & Wang, Ke & Hao, Yu & Fan, Jing-Li & Wei, Yi-Ming, 2013. "The impact of government policy on preference for NEVs: The evidence from China," Energy Policy, Elsevier, vol. 61(C), pages 382-393.
    21. Sierzchula, William & Bakker, Sjoerd & Maat, Kees & van Wee, Bert, 2014. "The influence of financial incentives and other socio-economic factors on electric vehicle adoption," Energy Policy, Elsevier, vol. 68(C), pages 183-194.
    22. Liu, Xiaoling & Sun, Xiaohua & Zheng, Hui & Huang, Dongdong, 2021. "Do policy incentives drive electric vehicle adoption? Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 49-62.
    23. Chen, Rongkai & Fan, Ruguo & Wang, Dongxue & Yao, Qianyi, 2023. "Effects of multiple incentives on electric vehicle charging infrastructure deployment in China: An evolutionary analysis in complex network," Energy, Elsevier, vol. 264(C).
    24. Xue, Yixi & Zhang, Yi & Wang, Zhuoli & Tian, Shuo & Xiong, Qian & Li, Lydia Qianqian, 2023. "Effects of incentive policies on the purchase intention of electric vehicles in China: Psychosocial value and family ownership," Energy Policy, Elsevier, vol. 181(C).
    25. Jing Liang & Yueming (Lucy) Qiu & Pengfei Liu & Pan He & Denise L. Mauzerall, 2023. "Effects of expanding electric vehicle charging stations in California on the housing market," Nature Sustainability, Nature, vol. 6(5), pages 549-558, May.
    26. Diao, Qinghua & Sun, Wei & Yuan, Xinmei & Li, Lili & Zheng, Zhi, 2016. "Life-cycle private-cost-based competitiveness analysis of electric vehicles in China considering the intangible cost of traffic policies," Applied Energy, Elsevier, vol. 178(C), pages 567-578.
    27. Jenn, Alan & Springel, Katalin & Gopal, Anand R., 2018. "Effectiveness of electric vehicle incentives in the United States," Energy Policy, Elsevier, vol. 119(C), pages 349-356.
    28. Haidar, Bassem & Aguilar Rojas, Maria Teresa, 2022. "The relationship between public charging infrastructure deployment and other socio-economic factors and electric vehicle adoption in France," Research in Transportation Economics, Elsevier, vol. 95(C).
    29. Jia, Wenjian & Chen, T. Donna, 2023. "Investigating heterogeneous preferences for plug-in electric vehicles: Policy implications from different choice models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 173(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Yiran & Zhao, Xiaolei & Lu, Dan & Li, Xiaomin, 2023. "Impact of policy incentives on the adoption of electric vehicle in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    2. Correia Sinézio Martins, Edlaine & Lépine, Julien & Corbett, Jacqueline, 2024. "Assessing the effectiveness of financial incentives on electric vehicle adoption in Europe: Multi-period difference-in-difference approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 189(C).
    3. Alali, Layla & Niesten, Eva & Gagliardi, Dimitri, 2022. "The impact of UK financial incentives on the adoption of electric fleets: The moderation effect of GDP change," Transportation Research Part A: Policy and Practice, Elsevier, vol. 161(C), pages 200-220.
    4. Khatua, Apalak & Ranjan Kumar, Rajeev & Kumar De, Supriya, 2023. "Institutional enablers of electric vehicle market: Evidence from 30 countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).
    5. Zhang, Junjie & Jia, Rongwen & Yang, Hangjun & Dong, Kangyin, 2022. "Does electric vehicle promotion in the public sector contribute to urban transport carbon emissions reduction?," Transport Policy, Elsevier, vol. 125(C), pages 151-163.
    6. Jinru Wang & Zhenwu Shi & Jie Liu & Hongrui Zhang, 2023. "Promoting “NEVs Pilot Policy” as an Effective Way for Reducing Urban Transport Carbon Emissions: Empirical Evidence from China," Sustainability, MDPI, vol. 15(14), pages 1-24, July.
    7. Xue, Yixi & Zhang, Yi & Wang, Zhuoli & Tian, Shuo & Xiong, Qian & Li, Lydia Qianqian, 2023. "Effects of incentive policies on the purchase intention of electric vehicles in China: Psychosocial value and family ownership," Energy Policy, Elsevier, vol. 181(C).
    8. Tamakloe, Reuben & Caesar, Livingstone Divine, 2024. "Decoding the patterns of critical factor associations driving electric vehicle recommendations," Transportation Research Part A: Policy and Practice, Elsevier, vol. 187(C).
    9. Qiu, Y.Q. & Zhou, P. & Sun, H.C., 2019. "Assessing the effectiveness of city-level electric vehicle policies in China," Energy Policy, Elsevier, vol. 130(C), pages 22-31.
    10. Liu, Jing & Li, Lingyue & He, Lingling & Ma, Xiaozhi & Yuan, Hongping, 2024. "Consumers or infrastructure firms? Who should the government subsidize to promote electric vehicle adoption when considering the indirect network and herd effects," Transport Policy, Elsevier, vol. 149(C), pages 163-176.
    11. Mekky, Maher F. & Collins, Alan R., 2024. "The Impact of state policies on electric vehicle adoption -A panel data analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    12. Yongqing Xiong & Shufeng Qin, 2021. "Differences in the effects of China’s new energy vehicle industry policies on market growth from the perspective of policy mix," Energy & Environment, , vol. 32(3), pages 542-561, May.
    13. Zhao, Xiaolei & Li, Xuemei & Zhao, Ziyao & Luo, Tianyi, 2024. "Media attention and electric vehicle adoption: Evidence from 275 cities in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 190(C).
    14. Burra, Lavan T. & Sommer, Stephan & Vance, Colin, 2024. "Policy complementarities in the promotion of electric vehicles," Energy Policy, Elsevier, vol. 192(C).
    15. Ruyu Xie & Liren An & Nosheena Yasir, 2022. "How Innovative Characteristics Influence Consumers’ Intention to Purchase Electric Vehicle: A Moderating Role of Lifestyle," Sustainability, MDPI, vol. 14(8), pages 1-24, April.
    16. Wang, Yitong & Fan, Ruguo & Du, Kang & Bao, Xuguang, 2023. "Exploring incentives to promote electric vehicles diffusion under subsidy abolition: An evolutionary analysis on multiplex consumer social networks," Energy, Elsevier, vol. 276(C).
    17. Mustafa Hamurcu & Tamer Eren, 2023. "Multicriteria decision making and goal programming for determination of electric automobile aimed at sustainable green environment: a case study," Environment Systems and Decisions, Springer, vol. 43(2), pages 211-231, June.
    18. Zhao, Xiaolei & Zhao, Ziyao & Mao, Yumeng & Li, Xuemei, 2024. "The role of air pollution in electric vehicle adoption: Evidence from China," Transport Policy, Elsevier, vol. 154(C), pages 26-39.
    19. Zheng, Xuemei & Menezes, Flavio & Zheng, Xiaofeng & Wu, Chengkuan, 2022. "An empirical assessment of the impact of subsidies on EV adoption in China: A difference-in-differences approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 162(C), pages 121-136.
    20. Ji, Qing & Wang, Chunan & Fan, Ying, 2022. "Environmental and welfare effects of vehicle purchase tax: Evidence from China," Energy Economics, Elsevier, vol. 115(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:190:y:2024:i:c:s0965856424002830. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.