IDEAS home Printed from https://ideas.repec.org/p/prc/dpaper/ks--2019-dp77.html
   My bibliography  Save this paper

The Effectiveness of China’s Plug-In Electric Vehicle Subsidy

Author

Listed:
  • Tamara Sheldon
  • Rubal Dua

    (King Abdullah Petroleum Studies and Research Center)

Abstract

Subsidies for promoting plug-in electric vehicle (PEV) adoption are a key component of China’s overall plan for reducing local air pollution and greenhouse gas (GHG) emissions from its light-duty vehicle sector. This paper explores the impact and cost-effectiveness of the Chinese PEV subsidy program. A vehicle choice model is estimated using a large random sample of individual-level data for new vehicle purchases in China for model year 2017.

Suggested Citation

  • Tamara Sheldon & Rubal Dua, 2019. "The Effectiveness of China’s Plug-In Electric Vehicle Subsidy," Discussion Papers ks--2019-dp77, King Abdullah Petroleum Studies and Research Center.
  • Handle: RePEc:prc:dpaper:ks--2019-dp77
    DOI: 10.30573/KS--2019-DP77
    as

    Download full text from publisher

    File URL: https://www.kapsarc.org/research/publications/the-effectiveness-of-chinas-plug-in-e-electric-vehicle-subsidy/
    File Function: First version, 2019
    Download Restriction: no

    File URL: https://libkey.io/10.30573/KS--2019-DP77?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Haaf, C. Grace & Morrow, W. Ross & Azevedo, Inês M.L. & Feit, Elea McDonnell & Michalek, Jeremy J., 2016. "Forecasting light-duty vehicle demand using alternative-specific constants for endogeneity correction versus calibration," Transportation Research Part B: Methodological, Elsevier, vol. 84(C), pages 182-210.
    2. Cascetta, Ennio & Papola, Andrea, 2009. "Dominance among alternatives in random utility models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(2), pages 170-179, February.
    3. Sheldon, Tamara L. & Dua, Rubal, 2018. "Gasoline savings from clean vehicle adoption," Energy Policy, Elsevier, vol. 120(C), pages 418-424.
    4. Jin, Ginger Zhe & Sorensen, Alan T., 2006. "Information and consumer choice: The value of publicized health plan ratings," Journal of Health Economics, Elsevier, vol. 25(2), pages 248-275, March.
    5. Mabit, Stefan L., 2014. "Vehicle type choice under the influence of a tax reform and rising fuel prices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 64(C), pages 32-42.
    6. Wenbo Li & Ruyin Long & Hong Chen & Feiyu Chen & Xiao Zheng & Muyi Yang, 2019. "Effect of Policy Incentives on the Uptake of Electric Vehicles in China," Sustainability, MDPI, vol. 11(12), pages 1-20, June.
    7. Brownstone, David & Bunch, David S. & Train, Kenneth, 2000. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 34(5), pages 315-338, June.
    8. John R. Hauser & Glen L. Urban, 1977. "A Normative Methodology for Modeling Consumer Response to Innovation," Operations Research, INFORMS, vol. 25(4), pages 579-619, August.
    9. Chugh, Randy & Cropper, Maureen, 2017. "The welfare effects of fuel conservation policies in a dual-fuel car market: Evidence from India," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 244-261.
    10. Earnhart, Dietrich, 2002. "Combining Revealed and Stated Data to Examine Housing Decisions Using Discrete Choice Analysis," Journal of Urban Economics, Elsevier, vol. 51(1), pages 143-169, January.
    11. Epstein, Andrew J., 2010. "Effects of report cards on referral patterns to cardiac surgeons," Journal of Health Economics, Elsevier, vol. 29(5), pages 718-731, September.
    12. Li, Wenbo & Long, Ruyin & Chen, Hong, 2016. "Consumers’ evaluation of national new energy vehicle policy in China: An analysis based on a four paradigm model," Energy Policy, Elsevier, vol. 99(C), pages 33-41.
    13. Ou, Shiqi & Hao, Xu & Lin, Zhenhong & Wang, Hewu & Bouchard, Jessey & He, Xin & Przesmitzki, Steven & Wu, Zhixin & Zheng, Jihu & Lv, Renzhi & Qi, Liang & LaClair, Tim J., 2019. "Light-duty plug-in electric vehicles in China: An overview on the market and its comparisons to the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 747-761.
    14. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy," Energy Policy, Elsevier, vol. 33(6), pages 757-775, April.
    15. Greene, David L. & Patterson, Philip D. & Singh, Margaret & Li, Jia, 2005. "Corrigendum to "Feebates, rebates and gas-guzzler taxes: a study of incentives for increased fuel economy" [Energy Policy 33 (2005) 757-775]," Energy Policy, Elsevier, vol. 33(14), pages 1901-1902, September.
    16. Helveston, John Paul & Feit, Elea McDonnell & Michalek, Jeremy J., 2018. "Pooling stated and revealed preference data in the presence of RP endogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 109(C), pages 70-89.
    17. Sheldon, Tamara L. & Dua, Rubal, 2019. "Measuring the cost-effectiveness of electric vehicle subsidies," Energy Economics, Elsevier, vol. 84(C).
    18. Jyrki Wallenius & James S. Dyer & Peter C. Fishburn & Ralph E. Steuer & Stanley Zionts & Kalyanmoy Deb, 2008. "Multiple Criteria Decision Making, Multiattribute Utility Theory: Recent Accomplishments and What Lies Ahead," Management Science, INFORMS, vol. 54(7), pages 1336-1349, July.
    19. Hunt Allcott & Nathan Wozny, 2014. "Gasoline Prices, Fuel Economy, and the Energy Paradox," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 779-795, December.
    20. Helfand, Gloria & Wolverton, Ann, 2011. "Evaluating the Consumer Response to Fuel Economy: A Review of the Literature," International Review of Environmental and Resource Economics, now publishers, vol. 5(2), pages 103-146, May.
    21. Zhang, Yong & Yu, Yifeng & Zou, Bai, 2011. "Analyzing public awareness and acceptance of alternative fuel vehicles in China: The case of EV," Energy Policy, Elsevier, vol. 39(11), pages 7015-7024.
    22. Erdem, Tulin & Broniarczyk, Susan & Charavarti, Dipankar & Kapferer, Jean-Noel & Keane, Michael & Roberts, John & Steenkamp, Jan-Benedict & Swait, Joffre & Zettelmeyer, Florian, 1999. "Brand Equity, Consumer Learning and Choice," MPRA Paper 53022, University Library of Munich, Germany.
    23. Helveston, John Paul & Liu, Yimin & Feit, Elea McDonnell & Fuchs, Erica & Klampfl, Erica & Michalek, Jeremy J., 2015. "Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 96-112.
    24. Xu, Lei & Chen, Nengcheng & Chen, Zeqiang, 2017. "Will China make a difference in its carbon intensity reduction targets by 2020 and 2030?," Applied Energy, Elsevier, vol. 203(C), pages 874-882.
    25. Qian, Lixian & Grisolía, Jose M. & Soopramanien, Didier, 2019. "The impact of service and government-policy attributes on consumer preferences for electric vehicles in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 70-84.
    26. James S. Dyer & Peter C. Fishburn & Ralph E. Steuer & Jyrki Wallenius & Stanley Zionts, 1992. "Multiple Criteria Decision Making, Multiattribute Utility Theory: The Next Ten Years," Management Science, INFORMS, vol. 38(5), pages 645-654, May.
    27. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    28. Catherine Tucker & Juanjuan Zhang, 2011. "How Does Popularity Information Affect Choices? A Field Experiment," Management Science, INFORMS, vol. 57(5), pages 828-842, May.
    29. Wang, Ning & Pan, Huizhong & Zheng, Wenhui, 2017. "Assessment of the incentives on electric vehicle promotion in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 101(C), pages 177-189.
    30. Ma, Shao-Chao & Xu, Jin-Hua & Fan, Ying, 2019. "Willingness to pay and preferences for alternative incentives to EV purchase subsidies: An empirical study in China," Energy Economics, Elsevier, vol. 81(C), pages 197-215.
    31. Sheldon, Tamara L. & Dua, Rubal, 2019. "Assessing the effectiveness of California's “Replace Your Ride”," Energy Policy, Elsevier, vol. 132(C), pages 318-323.
    32. Hardman, Scott & Chandan, Amrit & Tal, Gil & Turrentine, Tom, 2017. "The effectiveness of financial purchase incentives for battery electric vehicles – A review of the evidence," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 1100-1111.
    33. DeShazo, J.R. & Sheldon, Tamara L. & Carson, Richard T., 2017. "Designing policy incentives for cleaner technologies: Lessons from California's plug-in electric vehicle rebate program," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 18-43.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lijing Zhu & Jingzhou Wang & Arash Farnoosh & Xunzhang Pan, 2021. "A Game-Theory Analysis of Electric Vehicle Adoption in Beijing under License Plate Control Policy," Working Papers hal-03500766, HAL.
    2. Sheldon, Tamara L. & Dua, Rubal, 2021. "How responsive is Saudi new vehicle fleet fuel economy to fuel-and vehicle-price policy levers?," Energy Economics, Elsevier, vol. 97(C).
    3. Debnath, Ramit & Bardhan, Ronita & Reiner, David M. & Miller, J.R., 2021. "Political, economic, social, technological, legal and environmental dimensions of electric vehicle adoption in the United States: A social-media interaction analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).
    4. Wang, Kai-Hua & Su, Chi-Wei & Xiao, Yidong & Liu, Lu, 2022. "Is the oil price a barometer of China's automobile market? From a wavelet-based quantile-on-quantile regression perspective," Energy, Elsevier, vol. 240(C).
    5. Martin Kalthaus & Jiatang Sun, 2021. "Determinants of Electric Vehicle Diffusion in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(3), pages 473-510, November.
    6. Gu, Xiaoyu & Zhou, Li & Huang, Hongfu & Shi, Xiutian & Ieromonachou, Petros, 2021. "Electric vehicle battery secondary use under government subsidy: A closed-loop supply chain perspective," International Journal of Production Economics, Elsevier, vol. 234(C).
    7. Wen, W. & Yang, S. & Zhou, P. & Gao, S.Z., 2021. "Impacts of COVID-19 on the electric vehicle industry: Evidence from China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).

    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. Sheldon, Tamara L. & Dua, Rubal, 2021. "How responsive is Saudi new vehicle fleet fuel economy to fuel-and vehicle-price policy levers?," Energy Economics, Elsevier, vol. 97(C).
    2. van den Bijgaart, Inge, 2016. "Essays in environmental economics and policy," Other publications TiSEM 298bee2a-cb08-4173-9fe1-8, Tilburg University, School of Economics and Management.
    3. Yang, J. & Chen, F., 2021. "How are social-psychological factors related to consumer preferences for plug-in electric vehicles? Case studies from two cities in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    4. Azarafshar, Roshanak & Vermeulen, Wessel N., 2020. "Electric vehicle incentive policies in Canadian provinces," Energy Economics, Elsevier, vol. 91(C).
    5. Liu, Chang & Liu, Yuan & Zhang, Dayong & Xie, Chunping, 2022. "The capital market responses to new energy vehicle (NEV) subsidies: An event study on China," Energy Economics, Elsevier, vol. 105(C).
    6. Ciccone, Alice, 2018. "Environmental effects of a vehicle tax reform: Empirical evidence from Norway," Transport Policy, Elsevier, vol. 69(C), pages 141-157.
    7. Wen, W. & Yang, S. & Zhou, P. & Gao, S.Z., 2021. "Impacts of COVID-19 on the electric vehicle industry: Evidence from China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    8. Allcott, Hunt & Mullainathan, Sendhil & Taubinsky, Dmitry, 2014. "Energy policy with externalities and internalities," Journal of Public Economics, Elsevier, vol. 112(C), pages 72-88.
    9. Bansal, Prateek & Kumar, Rajeev Ranjan & Raj, Alok & Dubey, Subodh & Graham, Daniel J., 2021. "Willingness to pay and attitudinal preferences of Indian consumers for electric vehicles," Energy Economics, Elsevier, vol. 100(C).
    10. Ziwen Ling & Christopher R. Cherry & Yi Wen, 2021. "Determining the Factors That Influence Electric Vehicle Adoption: A Stated Preference Survey Study in Beijing, China," Sustainability, MDPI, vol. 13(21), pages 1-22, October.
    11. Wenbo Li & Ruyin Long & Hong Chen & Feiyu Chen & Xiao Zheng & Muyi Yang, 2019. "Effect of Policy Incentives on the Uptake of Electric Vehicles in China," Sustainability, MDPI, vol. 11(12), pages 1-20, June.
    12. Wu, Yang Andrew & Ng, Artie W. & Yu, Zichao & Huang, Jie & Meng, Ke & Dong, Z.Y., 2021. "A review of evolutionary policy incentives for sustainable development of electric vehicles in China: Strategic implications," Energy Policy, Elsevier, vol. 148(PB).
    13. Reyer Gerlagh & Inge Bijgaart & Hans Nijland & Thomas Michielsen, 2018. "Fiscal Policy and $$\hbox {CO}_{2}$$ CO 2 Emissions of New Passenger Cars in the EU," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(1), pages 103-134, January.
    14. Haaf, C. Grace & Morrow, W. Ross & Azevedo, Inês M.L. & Feit, Elea McDonnell & Michalek, Jeremy J., 2016. "Forecasting light-duty vehicle demand using alternative-specific constants for endogeneity correction versus calibration," Transportation Research Part B: Methodological, Elsevier, vol. 84(C), pages 182-210.
    15. Yip, Arthur H.C. & Michalek, Jeremy J. & Whitefoot, Kate S., 2018. "On the implications of using composite vehicles in choice model prediction," Transportation Research Part B: Methodological, Elsevier, vol. 116(C), pages 163-188.
    16. Meilinda Fitriani Nur Maghfiroh & Andante Hadi Pandyaswargo & Hiroshi Onoda, 2021. "Current Readiness Status of Electric Vehicles in Indonesia: Multistakeholder Perceptions," Sustainability, MDPI, vol. 13(23), pages 1-25, November.
    17. 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.
    18. Santos, Georgina & Rembalski, Sebastian, 2021. "Do electric vehicles need subsidies in the UK?," Energy Policy, Elsevier, vol. 149(C).
    19. Doremus, Jacqueline & Helfand, Gloria & Liu, Changzheng & Donahue, Marie & Kahan, Ari & Shelby, Michael, 2019. "Simpler is better: Predicting consumer vehicle purchases in the short run," Energy Policy, Elsevier, vol. 129(C), pages 1404-1415.
    20. Eunsung Kim & Eunnyeong Heo, 2019. "Key Drivers behind the Adoption of Electric Vehicle in Korea: An Analysis of the Revealed Preferences," Sustainability, MDPI, vol. 11(23), pages 1-15, December.

    More about this item

    Keywords

    China Electric Car Market; China New Energy Vehicle Policy; Subsidies for Electric Vehicle;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:prc:dpaper:ks--2019-dp77. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/kapsasa.html .

    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: Michael Gaffney (email available below). General contact details of provider: https://edirc.repec.org/data/kapsasa.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.