Power play: How governments are spurring the electric vehicle industry
White paper
Assessment of electric car promotion policies in Chinese cities
In recent years, China has demonstrated impressive growth in its electric vehicle fleet. In 2017, new plug-in electric car sales in China contributed to almost half of the total sales worldwide. This study comprehensively catalogues governmental actions that spurred the sales of electric cars in 30 cities collectively representing 84% of the nation’s electric car market.
Findings include:
A comprehensive suite of policy actions was adopted by cities to promote electric cars. The 30 cities in our study deployed more than 20 policy actions, including direct subsidies and tax deductions—incentives that indirectly provide monetary value to consumers—and preferential measures for electric car fleet application. The most prevalent policies, adopted by more than 10 cities, were new vehicle purchase subsidies, exemption/reduction of annual vehicle tax for electric cars, and providing adequate charging facilities. Other major policies were car-sharing programs, charging fee reduction, license plate/registration privileges, parking fee incentives, road access privileges, taxi fleet purchase incentives, and group purchase subsidies.
Electric cars were being deployed disproportionately in the country. The top 30 cities represented only 26% of auto sales, but they made up 84% of electric car deployment in the entire country. In 2015, the average market penetration of electric cars in these cities was 2.7%, significantly greater than the national average of 0.8%.
Incentives remain a key part of driving the private market for electrics. Greater monetary value of the full policy package offered in a city was found to evidently correlate with higher market share of private plug-in cars. The incentives include both financial and nonfinancial policy actions.
New vehicle registration incentives in mega cities were the major appeal to private consumers. In these 30 cities, direct vehicle purchase subsidies did little to explain the strength of the local electric vehicle market performance. Instead, we found that mega cities used new vehicle registration incentives, such as exempting or treating electric cars preferentially in the license plate quota systems, as the major appeal to private consumers.
