In recent decades, China’s rapid
economic growth has enabled more and more consumers to buy their own cars. The result has been improved mobility and the largest automotive market in the world but also serious urban air pollution, high greenhouse gas emissions, and growing dependence on oil imports.
To counteract those troubling trends, the Chinese government has imposed policies to encourage the adoption of plug-in electric vehicles (EVs). Since buying an EV costs more than buying a conventional internal combustion engine (ICE) vehicle, in 2009 the government began to provide generous subsidies for EV purchases. But the price differential and the number of buyers were both large, so paying for the subsidies became extremely costly for the government.
In recent decades, China’s rapid
economic growth has enabled more and more consumers to buy their own cars. The result has been improved mobility and the largest automotive market in the world but also serious urban air pollution, high greenhouse gas emissions, and growing dependence on oil imports.
To counteract those troubling trends, the Chinese government has imposed policies to encourage the adoption of plug-in electric vehicles (EVs). Since buying an EV costs more than buying a conventional internal combustion engine (ICE) vehicle, in 2009 the government began to provide generous subsidies for EV purchases. But the price differential and the number of buyers were both large, so paying for the subsidies became extremely costly for the government.