The Logic of Change in China’s New Energy Vehicle Fiscal Subsidy Policy

Abstract

The vigorous development of new energy vehicles as a representative of emerging industries is inseparable from government financial subsidies. In recent years, with the continuous expansion of the new energy vehicle industry and the transformation of the national economy into an innovation-driven one, the centralized financial subsidy policy for new energy vehicles has undergone tremendous adjustments marked by the withdrawal of the "national subsidy". Using the historical institutionalism analysis framework, we systematically review the history of China's new energy vehicle subsidy policy, and divide it into four stages: the creation of the pilot stage, rapid expansion, comprehensive promotion, and adjustment and change. From the structural viewpoint, factors such as national economic development, global industrial competition, and changes in the concept of development have, to varying degrees, contributed to the change in the financial subsidy policy for new energy vehicles. From the historical point of view, the financial subsidy policy has been continuously self-reinforcing under the learning effect, coordination effect and adaptive expectation, but also due to the negative incentives for market players to take malicious subsidy fraud to make the contradictions gather and explode, which constitutes a key node of policy change. The current new energy vehicle subsidy policy is in the stage of adjustment and change, the future should be strengthened technology research and development incentives to regulate at the same time to avoid the formation of subsidy dependence of enterprises, and strengthen the subsidy of infrastructure facilities.