Forecasting new energy vehicle sales with grey model incorporating impact of policies

Accurate prediction of new energy vehicle sales is essential for companies to understand industry development trends, especially under the impact effects of policy shocks such as price reduction policies and subsidy policy. Moreover, the market typically requires a certain period to respond these policy shocks. To tackle this issue, this paper first analysis the process of policy impact and construct an expression to depict this process. Second, based on the relationship between the initial impact intensity and the actual time of action, an expression is proposed for the impact intensity and its time-lag. Subsequently, a novel grey forecasting model incorporating the impact of policies is constructed. Then, the model is applied to forecast sales of the BYD Qin PLUS in three different areas: the whole country, the mature market and the emerging market. Experimental results demonstrate that the proposed model delivers superior reliability and stability in prediction accuracy compared to other models.