The impact of policy mixes on new energy vehicle diffusion in China

ABSTRACT: The Chinese government has instituted a number of policies to actively promote the diffusion of new energy vehicles (NEVs). There is widespread consensus that policy mixes can drive NEV diffusion effectively. To verify this consensus, we construct a two-dimensional framework of NEV policy instruments: producer-orientation versus consumer-orientation instruments, economic in cash versus regulatory instruments and classify NEV policy mixes. Then, we analyse the impact of policy mixes on NEV diffusion among enterprises and consumers by building an evolutionary game model. And according to the concept of stable area in the evolutionary game, we propose a definition of policy effect. The results show: (1) Policy mixes can reduce the saddle point of the auto market game and accelerate the spread of NEVs. In the early stages of the NEV industry, the government should take the policy mix strategy with four policies, and economic in cash instrument should be the main policy. (2) Policy mixes composed of producer-orientation and consumer-orientation instruments have a synergy or complementarity to promote NEV diffusion effectively. (3) With the increasing rate of NEV production and consumption, the government should adopt policy mixes mainly composed of regulatory instruments and rather than economic instruments. GRAPHICAL ABSTRACT: [Image: see text]