Impact of vehicle purchase tax exemption on electric vehicle sales: Evidence from China's automotive industry

• Published in: Energy strategy reviews Vol. 49; p. 101148
• Main Author: Liu, Zixian
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.09.2023; Elsevier
• Subjects: Automotive industry; Electric vehicles; Vehicle purchase tax; Electric vehicles; Automotive industry; Vehicle purchase tax
• ISSN: 2211-467X; 2211-467X
• DOI: 10.1016/j.esr.2023.101148

Environmental pollution and the global scarcity of fossil fuels are becoming worse. The study empirically quantifies the causal link between the rise in new energy vehicle sales and the exemption of vehicle purchase tax on such cars, using a difference-in-differences specification to exploit exogenous variation from the introduction of the car purchase tax exemption policy. This study concludes that the policy increased electric car sales by an average of 177.3% and serves as a catalyst for discussing the importance of regulations and sales. •Developed a DiD framwork to exploit exogenous changes by exempting vehicle purchase tax in China.•The incentive of vehicle purchase tax exemption policy has a much more significant impact on electric vehicle sales than on vehicle purchase cost, energy consumption and range.•The policy has greatly increased electric car sales by an average of 177.3%. Therefore, this study serves as a catalyst for discussing and researching the influence of regulations and sales volume.•Through a robustness type test, which allows being more confident about the role of the policy of exemption of vehicle purchase tax.