TY - JOUR
T1 - Effectiveness of electric vehicle subsidies in China
T2 - A three-dimensional panel study
AU - Zhang, Tong
AU - Burke, Paul J.
AU - Wang, Qi
N1 - Publisher Copyright:
© 2024 The Authors
PY - 2024/2
Y1 - 2024/2
N2 - Electric vehicles (EVs) are likely to emerge as the main means of zero-emission road transport. China has used a variety of policy approaches to encourage EV adoption, including vehicle purchase subsidies. This study uses a three-dimensional dataset to estimate the effect of purchase subsidies for domestic EVs on adoption in 316 cities in China over January 2016–December 2019. An instrumental variable approach that utilizes the timing of the cancellation of local subsidies by the central government is pursued. The findings suggest that purchase subsidies for domestic EVs have led to a sizeable increase in uptake, but have discouraged uptake of imported EVs. Higher consumer awareness of the subsidies is associated with a larger proportional effect on uptake of domestically-produced vehicles. We estimate that increases in the per-vehicle subsidy rate have on average reduced carbon dioxide (CO2) emissions at a marginal subsidy cost of about 4453 CNY (US$712) per tonne, which is high. However other benefits, including long-run benefits from the emergence of a new clean technology sector, may be substantial.
AB - Electric vehicles (EVs) are likely to emerge as the main means of zero-emission road transport. China has used a variety of policy approaches to encourage EV adoption, including vehicle purchase subsidies. This study uses a three-dimensional dataset to estimate the effect of purchase subsidies for domestic EVs on adoption in 316 cities in China over January 2016–December 2019. An instrumental variable approach that utilizes the timing of the cancellation of local subsidies by the central government is pursued. The findings suggest that purchase subsidies for domestic EVs have led to a sizeable increase in uptake, but have discouraged uptake of imported EVs. Higher consumer awareness of the subsidies is associated with a larger proportional effect on uptake of domestically-produced vehicles. We estimate that increases in the per-vehicle subsidy rate have on average reduced carbon dioxide (CO2) emissions at a marginal subsidy cost of about 4453 CNY (US$712) per tonne, which is high. However other benefits, including long-run benefits from the emergence of a new clean technology sector, may be substantial.
KW - Carbon dioxide emissions
KW - Consumer awareness
KW - Electric vehicle subsidies
KW - Imported vehicles
UR - http://www.scopus.com/inward/record.url?scp=85181913609&partnerID=8YFLogxK
U2 - 10.1016/j.reseneeco.2023.101424
DO - 10.1016/j.reseneeco.2023.101424
M3 - Article
SN - 0928-7655
VL - 76
JO - Resource and Energy Economics
JF - Resource and Energy Economics
M1 - 101424
ER -