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To promote the market penetration of electric vehicles (EV), China launched the Electric Vehicle Subsidy Scheme (EVSS) in Jan 2009, followed by an update in Sep 2013, which we named phase I and phase II EVSS, respectively. In this paper, we presented the rationale of China’s two-phase EVSS and estimated their impacts on EV market penetration, with a focus on the ownership cost analysis of battery electric passenger vehicles (BEPV). Based on the ownership cost comparison of five defining BEPV models and their counterpart conventional passenger vehicle (CPV) models, we concluded that in the short term, especially before 2015, China’s EVSS is very necessary for BEPVs to be cost competitive compared with CPVs. The transition from phase I to phase II EVSS will generally reduce subsidy intensity, thus resulting in temporary rise of BEPV ownership cost. However, with the decrease of BEPV manufacturing cost, the ownership cost of BEPV is projected to decrease despite of the phase-out mechanism under phase II EVSS. In the mid term of around 2015–2020, BEPV could become less or not reliant on subsidy to maintain cost competitiveness. However, given the performance disadvantages of BEPV, especially the limited electric range, China’s current EVSS is not sufficient for the BEPV market to take off. Technology improvement associated with battery cost reduction has to play an essential role in starting up China’s BEPV market.

We established a bottom-up model to deliver the future trends of fuel consumption and life cycle greenhouse gas (GHG) emissions by China's on-road trucks. The mitigation measures of mileage utilization rate (MUR) improvement, fuel consumption rate (FCR) improvement, and penetration of liquefied natural gas (LNG) fueled trucks were evaluated. With no mitigation measures implemented, in the year 2050, the total fuel consumption and life cycle GHG emissions by China's on-road trucks were projected to reach 498 million toe and 2125 million tons, respectively, approximately 5.2 times the level in 2010. If the MUR of trucks in China is increased from the current status as those of the developed countries, a 13% reduction of total fuel consumption can be achieved after 2020. If the FCR of trucks is reduced by 10% in 2011, 2016, 2021, and 2026, a 30% reduction of total fuel consumption can be achieved after 2030. Moreover, if the share of LNG fueled trucks in all newly registered semi-trailer towing trucks and heavy-duty trucks is increased to 20% in 2030, an estimate of 7.9% and 10.9% of the total diesel consumption by trucks will be replaced by LNG in 2030 and 2050, respectively.

The fast growth of vehicle population in China has caused problems such as traffic congestion and excessive fuel consumption. There have been demands for policy control on growth in private vehicle travel demand. Beijing and Shanghai are China’s first two cities to implement policies on vehicle ownership and use. In this paper, we compared policies in the two cities and estimated their impacts on fuel consumption by passenger vehicles. The limitation of vehicle use in Beijing provides limited but immediate reduction in fuel consumption. The limitation of vehicle ownership in Shanghai provides large potential of fuel conservation in a longer term. Under current policy, fuel consumptions by passenger vehicles in Beijing and Shanghai in 2020 were estimated to reach 7.5 and 3.9 billion liters, respectively. The experiences of Beijing and Shanghai are highly relevant for cities in China and abroad that are facing the same problems.

The problems of the transportation energy and environment are the major challenges faced globally in the 21st century and are especially serious for China. The future 20 years is the strategic opportunity period of the transition of the transportation energy and powertrain system for China. The greatest characteristics of hydrogen economy lie in its diversity of the primary energy source, the unification of energy carrier and the greening of energy transformation. Development of hydrogen energy transportation powertrain system is suitable for China from the views of the situation of Chinese resources and energy sources, the urban and rural layouts, the superiority of later development and the successful practices of clean cars and electric vehicle development projects. The transition of the transportation energy powertrain system includes three parts: the transition of the energy structure, the transition of the powertrain system and the transition of the fuel infrastructure. The technical pathways of energy powertrain system transition includes expending the use of gaseous fuel to prompt the multiform of the transportation energy and to prepare for the transition of the infrastructure simultaneously, developing and promoting the hybrid technology to solve the current energy and environment problems and to prepare for the transition of powertrain system, and focusing on the research and development and demonstration of fuel cell vehicles and the hydrogen energy technology to prompt the earlier formation of the market of fuel cell vehicles. The goal in the near and medium term of transition is to reduce the fuel consumption by 100 million ton in 2020 by substituting and saving, and the long-term goal is to setup the infrastructure of hydrogen and fuel cell vehicle as the main one replacing the petroleum internal combustion engine vehicle. In order to realize the strategic goals of the transition, the four-phases strategic periods and research and development activities are discussed and proposed.