China's central and local governments have combined to offer consumers subsidies that can surpass the equivalent of $16,000 per vehicle.
That is more than half the price of the best-selling plug-in hybrid EV in China, the BYD Qin PHEV, which starts at the equivalent of $31,192. The best-selling pure EV in China, the Kandi Panda, costs $23,139, says Yale Zhang, managing director of consultancy Automotive Foresight in Shanghai.
In the U.S., federal subsidies top off at $7,500. Some states offer additional subsidies.
The Chinese government's largesse is not bottomless, however. Subsides for electric passenger vehicle purchases are scheduled to decrease, ending in 2021.
And despite subsidies, Chinese drivers have not enthusiastically embraced EVs. The lack of charging stations is one reason.
Sales of EVs did surge in 2015, however, more than quadrupling to 331,092 vehicles.
The growth in sales was largely due to local government purchases, says Zhang.
The central government in Beijing ordered Chinese cities to meet new-energy vehicle purchase targets, he says. That caused a surge in production and sales. The percentage of new-energy vehicle sales accounted for by commercial vehicles rose to 45.5 percent in 2015 from 38.4 percent in 2014, according to Automotive Foresight.
Also, Beijing in February ordered local governments to make 50 percent of all new fleet vehicle purchases new-energy vehicles, up from a 30 percent mandate.
There are other possible policy boosts for passenger EV sales. On-demand ride-hailing companies are growing quickly in China. Didi Kuaidi, China's largest, completed 1.43 billion rides in 2015.
At some point, Beijing will require those companies to use EVs, predicts Bill Russo, a managing partner at Gao Feng Advisory Co. in Shanghai.
"If you want a higher penetration and market share of electrification, you can require these on-demand companies to electrify their fleets," he says. "I can see a quick acceleration of electrification."