Accelerating new energy vehicle uptake in Chinese cities: A 2023 policy update in a post-subsidy era

China has officially concluded its central purchase subsidy for new energy vehicles (NEVs) after gradually phasing out the subsidies over the preceding years. Meanwhile, various other policies are continuing to drive the development of NEVs. These policies include but are not limited to NEV mandates, exemptions and reductions in taxes for NEVs, and central and local policies supporting carbon peaking and carbon neutrality goals. Furthermore, new city-level policies are emerging as a result of both central government directives and local initiatives.

This briefing, which updates previous reports on NEV policies through 2020, analyzes policy trends for new energy passenger cars and commercial vehicles in an evolving policy landscape where the central purchase subsidies come to an end at the end of 2022. Data was collected up to September 2023. Many city-level policies introduced during the pandemic have been extended into 2022 and 2023, including usage subsidies and preferential road access.

China is the leading electric vehicle market, with the 6.2 million NEVs sold in 2022 (an 82% increase from 2021) representing 59% of total global sales, China is actively exploring policy alternatives following the end of central purchase subsidies. Key challenges include varying NEV adoption rates across regions, expanding charging infrastructure on highways and in residential areas, and managing NEV battery recycling. The policy choices and trends discussed in this briefing provide valuable insights into China’s transition away from central purchase subsidies and its shift towards new incentives and strategies for promoting NEVs.

Zero-emission vehicles