Modeling the Diffusion of New Energy Vehicles in China Considering Subsidy Policies

The new energy vehicle(NEV) subsidy policy introduced in China in 2013 has significantly boosted the adoption and sales of NEVs, with sales increasing more than 40-fold. However, the mechanisms by which subsidy policies influence the diffusion of NEVs in China remain unclear, posing challenges for governments to design future strategies. Thus, the primary objective of this paper is to empirically examine the impact of subsidy policy on the diffusion of new energy vehicles and to forecast future development trends using the grey Bass model, a predictive model suited for new product adoption forecasting. Our findings suggest that while the sales of NEVs in China will continue to rise,the growth rate will slow. Key milestones include the first inflection points for new energy vehicles and battery electric vehicles, anticipated in 2025 and 2024 respectively, with peak sales expected in 2028 and 2027. These insights are crucial for manufacturers, enabling them to adjust their production strategies timely and enhance their resilience in the market.