Abstract：This paper examines consumer responses to the 2020 phase-out of electric vehicle (EV) subsidies in China using a Difference-in-Differences (DD) strategy with monthly sales data. We uncover heterogeneous responses across different EV models, with significant impacts observed in the group facing a two-stage subsidy reduction. Moreover, evidence of forward-looking behavior indicates consumers adjusted their purchasing decisions in anticipation of future subsidy cuts. These findings highlight the significance of nuanced policy design in fostering sustainable EV adoption.

Key Words: Industrial policy; Difference-in-Differences; Inter-temporal effects; Electric vehicle market.

http://www.aeconf.com/Articles/Nov2024/aef250205.pdf