The Impact of Recent Changes to China’s Plug-In Electric Vehicle Subsidy Design

Subsidies that promote plug-in electric vehicle (PEV) adoption have been a key component of China’s overall plan for reducing local air pollution and the greenhouse gas emissions from its light-duty vehicle sector. Since 2009, PEVs qualify for substantial rebates (up to US$9,000) from both the central and local Chinese governments. However, PEV subsidies were cut by almost 50% from June 2019 onward, and China had plans to eliminate the subsidies in 2020.