Market effect of Chinese new energy vehicle promotion policy adjustment: subsidy withdrawal, technological advancement, and sales growth.

The promotion policies of the new energy vehicle (NEV) industry have evolved over time along with its rapid development in China. The NEV market has advanced to a new level where it complies with international practices and fully accommodates competition. Studying the market implications of the NEV promotion policy adjustment is of significant theoretical and practical value given the subsidy withdrawal, technological advancement, and sales growth. Based on interrupted time series analysis, this paper used 60 monthly time points from January 2017 to December 2021 to construct a time-series data set. Taking promotion policy adjustment as a policy variable, this paper estimated the market effect disparities of promotion policies in major cities in China through counterfactual analysis, and the special phenomenon of NEV sales climbing caused by subsidy withdrawal was further analyzed. Furthermore, the study findings were verified by robustness and heterogeneity tests. The result showed that: 1 After several adjustments, the national NEV promotion policy achieved remarkable results in the first-tier and new first-tier cities and other developed areas in general. 2 The key factor to promote the NEV market was technological advancement, and the essence of subsidy withdrawal was to promote more rapid technological innovation among relevant enterprises by raising the threshold of subsidy technology and eliminating backward production capacity. It was the subsidy withdrawal that led to sales growth. 3 The policy of relaxing curbs on NEV purchases failed to significantly promote the sales of NEVs and did not seem to be unsustainable, so it should not be regarded as a key promotion policy in the future. It is suggested that the pertinent departments shift their promotion policies in favor of the user side, increase investment in NEV technology research and development, accelerate the elimination of backward production capacity through policies and regulations, adjust the license number plate support policy for new energy vehicles in due course, and further improve the double-credit policy. [ABSTRACT FROM AUTHOR]