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U.S. and Chinese Electric Vehicle Policies – EV Policy Comparison for United States & China


 

The United States and China are the largest electric vehicle (EV) markets. In 2016, China had 336,000 new EV registrations and the United States had 160,000 after a slight drop in 2015. Currently, policy support is playing a major role in developing and deploying EVs in both countries since EVs are still at a disadvantage compared to conventional vehicles. The high upfront price tag of EVs is one factor deterring consumers. In 2016, EVs cost about $15,000 more than conventional vehicles on average and are not expected to match the price of conventional vehicles until 2025. Other disadvantages such as limited access to charging stations, relatively slow charging, and an oft-limited travel range make EVs less attractive to consumers. This article will discuss policy tools used by the United States and China to address the above problems, including providing incentives, installing charging stations, research and development (R&D), and fleet procurement.

China US
In 2016, China had 336,000 new EV registrations United States had 160,000 after a slight drop in 2015
Incentives
·         EVs were exempt from purchase taxes from 2014 to 2017 and the government has renewed the exemption through 2020. The subsidy program was renewed in 2016 – up to RMB 55,000 ($8,736) for each BEV and up to RMB 30,000 ($4,765) for each PHEV. It will decrease by 20 percent in 2017 and 2018 based on 2016’s standard, and by 40 percent in 2019 and 2020 based on 2016’s standard. China plans to phase out the subsidy entirely by 2020.·         Another important policy in China, the “dual-credit policy,” will take effect in April 2018 and impose compulsory targets for vehicle manufacturers starting from 2019. Under the policy, vehicle manufacturers will be assessed in terms of fuel consumption and EV production in order to qualify for new energy credits Apart from financial incentives, incentives such as high occupancy vehicle (HOV) lane exemptions and expedited license plate acquisitions have been offered. More than 10 American states have allowed EVs to use HOV lanes, including California, Colorado, Florida, and New York. Hawaii also exempts PEVs from parking fees. EV drivers in New Jersey enjoy a 10 percent discount on off-peak New Jersey Turnpike and toll road rates
EV Charging station
China intends to build 12,000 charging stations by 2020, which can accommodate five million EVs. Local governments could receive RMB 90 million ($14 million/Rs. 900 million) to build charging stations if they meet certain conditions, such as reaching a set amount of EV purchases. In addition, Chinese provinces and cities have made announcements to support installing charging stations via subsidies. The most generous subsidy could reach 30 percent of the total investment. The U.S. General Services Administration (GSA) has installed EV charging stations for federal employees and other authorized users. In addition, more than 10 states offer rebates and tax credits for installing charging stations. For example, the Los Angeles Department of Water and Power provides up to $4,000 (Rs. 2,59,200) per charger to commercial customers who install charging stations. Arizona residents can receive a tax credit of up to $75 (Rs. 4860) to install a charging station in their own home.
Industry Impacts
China has witnessed a more significant development of EV sales. In 2011, only 8,159 EVs were sold in China, but that number increased to 331,092 in 2015. The International Energy Agency predicts that China could account for more than 40 percent of global EV sales in 2040. According to the U.S. Department[1] of Transportation, 9,750 EVs were sold domestically in 2011, with sales jumping to 71,044 in 2015. The U.S. Energy Information Administration concluded that BEV sales made up about one percent of total U.S. vehicles sold in 2017. This number could increase to 12 percent in 2050, partly due to state policies and lower battery costs[2].

[1] http://www.eesi.org/articles/view/comparing-u.s.-and-chinese-electric-vehicle-policies

[2] https://pdfs.semanticscholar.org/7352/180e8bb53a2fb60d602a7ddf7dba69e2ab45.pdf

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Narasimhan Santhanam

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