Analysis of incentive policies for electric vehicle adoptions after the abolishment of purchase subsidy policy

Abstract The purchase subsidy policy for electric vehicles (EVs) has considerably stimulated the purchase preferences of price-sensitive consumers and helped to increase the penetration rate of EVs in China. However, the purchase subsidy also brings increased financial burdens to governments; therefore, it is viewed as a short-term policy and will phase out. Considering the price sensitivity of different consumer categories, this paper aims to investigate the impact of several substitutional incentive policies to continue stimulating the adoption preference of EVs after the purchase subsidy phase-out. A latent class binary logit (LCBL) model is established to explore consumers’ EV adoption preferences in different price-sensitive categories. Four substitutional incentive policies, including mileage subsidy, congestion fee discount, parking fee discount, and bus lane driving permission, are proposed to cope with the abolishment of purchase subsidy. The results show that the incentive effect of the purchase subsidy policy on price-sensitive consumers is 1.6 times that of price-insensitive consumers. To avoid the reduction in EV adoption rate caused by the abolishment of purchase subsidy, mileage subsidy, parking fee discount, or congestion fee discount should be set at 0.93 CNY/km, 4.43 CNY/hour, or 16.09 CNY/time, respectively.