Dynamic Tax and Subsidy Mechanisms for New Energy Vehicle Promotion: Evolutionary Dynamics of Government–Consumer Interactions

Purchase tax exemption and vehicle trade-in subsidies are important demand-side policy instruments for promoting new energy vehicle (NEV) adoption in China. This study examines how static and dynamically adjusted tax and subsidy mechanisms affect the strategic evolution of the government and consumers. Based on the assumption of bounded rationality, this study develops a government–consumer evolutionary game model and derives replicator dynamics to analyze equilibrium stability under different policy mechanisms, followed by numerical simulations and sensitivity analyses. The results show that: (1) the static tax and subsidy mechanism does not converge asymptotically, whereas dynamic mechanisms enable the strategies of both the government and consumers to converge toward an interior equilibrium, with the static-tax and dynamic-subsidy combination showing relatively more favorable performance; (2) a moderate increase in the NEV purchase tax during the phase-out period raises the equilibrium probabilities of policy implementation and NEV adoption, but slows convergence and increases market fluctuations, with consumers more sensitive to changes in the NEV purchase tax than to changes in the fuel-vehicle purchase tax; (3) higher trade-in subsidies granted when an old vehicle is replaced with an NEV increase fiscal pressure and weaken the government’s implementation incentive, whereas higher subsidies for replacement with a conventional fuel vehicle strengthen the government’s implementation incentive but reduce consumers’ probability of choosing NEVs; and (4) policy management costs affect consumers’ strategic choices, while improvements in the baseline utility of NEVs can reduce reliance on policy intervention. These findings provide theoretical insights for coordinating purchase-tax and trade-in-subsidy adjustments and supporting a gradual transition toward demand-driven NEV adoption.