By Fan Zhang 2020 #Infra4Dev Conference: Decarbonizing Infrastructure www.worldbank.org/infra4dev2

1. Decarbonizing Transport: lightNing Talks
Fan Zhang, world Bank
Effectiveness of Electric Vehicle Incentives in China

2. Motivation
Source: IEA, EAFO
• China has the largest EV
market in the world
• The study provides the first
empirical evidence on the
effectiveness of various
incentive policies for China’s
EV market

3. Incentive Policies
• Consumer subsidies
• Exemption from driving restrictions
• Green plate policy
• Charging infrastructure

4. Incentive Policies
Charging Ports per million Residents by City

5. Data
• Quarterly EV sales by city and vehicle trim from 2015 to 2018,
including detailed vehicle attributes by trim
• Charging stations information including opening date, location, and
the number of charging ports
• Consumer subsidies and other policies aimed at promoting consumer
adoption of EVs

6. Identification Strategy
• Instrumental variable method
• Central subsidies and battery capacity as IVs for vehicle price
• Lagged installed EV base by institutional buyers as IV for the charging stations
• City-border regression design
• cluster-time fixed effects to control for time-varying local unobservable
• cluster-brand-year fixed effects control for brand-specific demand shocks

7. Regression Results

8. Simulation results

9. conclusions
• Consumer subsidies from central and local explain over half of the EVs
sold during 2015-2018.
• Investment on charging infrastructure is about four times as cost-
effective in promoting EV sales as consumer subsidies.
• Green plate policy is very cost-effective in promoting EVs and
increased EV sales by 18% during 2016-2018