Welfare analysis of the subsidies in the Chinese electric vehicle industry*
通过结构模型和反事实分析，研究中国电动汽车补贴对销量和福利的影响，发现补贴促进国产车扩散但可能阻碍技术进步，且从减少污染角度看补贴不合理。
We employ a structural model and counterfactual analysis to identify the impact of subsidies on the Chinese electric vehicle (EV) sales and examine their welfare effects. Our findings suggest that subsidies are effective in promoting the diffusion of domestic EVs, but may adversely affect technological advancement. When the subsidies on domestic EVs are reduced, the welfare on domestic EV consumers and producers decreases. However, the reduction in government spending on EV subsidies outweighs this private welfare loss. Thus, the overall welfare increases. Subsidies cannot be justified from the perspective of reducing externalities because they increase rather than decrease pollution.