Evaluating the Effect of Policies and the Development of Charging Infrastructure on Electric Vehicle Diffusion in China

China has been one of the most aggressive countries in electric vehicle (EV) promotion. However, private EV sales fail to achieve the government’s target. In particular, cutting purchase subsidies poses great uncertainty in relation to EV diffusion. In this research, a system dynamics model aims to investigate the influence of government policies, infrastructure development plans, the duration of policies, and the phase out strategy of policies. Parameters relating to consumers’ preferences are drawn from a questionnaire survey, which is conducted in Shenzhen, the pioneer city in China’s EV promotion. The result of a scenario analysis shows that purchase subsidies, purchase restrictions and driving restrictions are the most effective policies for EV promotion. Driving restrictions are more effective but less easy to enforce than purchase restrictions. The number and location of charging piles are much more important than large charging stations. Moreover, EV diffusion can be self-sufficient after current policies have been maintained for 11 years. We find that the gradual removal of subsidies will cause a four-year delay in EV sales entering rapid growth in Shenzhen. However, cutting subsidies in cities without purchase restrictions will cause the failure of EV promotion.