Determinants of Electric Vehicle Diffusion in China

Abstract We analyze the effect of four determinants of electric vehicle diffusion in China for a panel of 31 regions for the period 2010–2016. We analyze diffusion of four different electric vehicle types, namely battery electric cars and buses as well as plug-in hybrid electric cars and buses. System GMM panel estimation results show that total monetary subsidies have a positive effect only on the diffusion of battery electric cars. A closer look reveals that subsidies provided by regional governments are decisive for all types of vehicles but the subsidy provided by the central government and its degression over time dilute the overall effect of subsidies and is partly detrimental. Non-monetary ownership policies, such as license-plate lotteries, show a positive effect only for battery electric cars. Availability of public charging infrastructure increases diffusion of all vehicle types. Charging points are relevant for cars, while charging stations are especially decisive for the diffusion of electric buses. Using local environmental conditions as a novel determinant for the diffusion of electric vehicles reveals that the local air pollution influences the diffusion of buses, but not of cars.