Can intelligentization hedge the effect of purchase subsidy decrease for new energy vehicle? Based on computable general equilibrium (CGE) approach

ABSTRACT

Because of double pressures from “twelve consecutive declines” in monthly sales year-on-year and the novel coronavirus outbreak, purchase subsidy decrease for new energy vehicle had to be postponed from the end of 2020 to 2022. However, carmakers concentrating on intelligentization were outstanding and became the center of attention. Therefore, when purchase subsidy decrease should apply for and whether intelligentization can hedge the negative effect should be answered immediately. This paper builds a computable general equilibrium (CGE) model by adding productive intelligentization factors to production function and using procedure intelligentization factors to utility function, using different macro-closure to simulate the period of insufficient supply or demand and Chinese statistical data in 2018 to calibrate parameters, to analyze the suitable situation for purchase subsidy decrease and the difference and function border of hedging between productive intelligentization and using procedure intelligentization. The results show that purchase subsidy decrease for new energy vehicle should apply for the period of insufficient supply, because it will promote the low correlation industries and decrease the income inequality, while using procedure intelligentization developed moderately can hedge the negative effects to social farewell and new energy industry caused by purchase subsidy decrease and will not over hedge the above positive effects at the same time. But in the period of insufficient demand, the above positive effects will be altered to negative and hardly be hedged by intelligentization. Therefore, the policy decision of purchase subsidy decrease for new energy vehicle should depend on the degree of economic recovery from the novel coronavirus outbreak. If economic recovery is rapid, we can develop using procedure intelligentization moderately, namely, self driving, to hedge the subsidy decrease. Otherwise, we should postpone the subsidy decrease. © 2022 Systems Engineering Society of China. All rights reserved.