  "Green Premiums" which means the difference in cost between
emissions-emitting technology and zero-emissions or emissions-reducing
technology is significant for those renewable energy technology to address the
climate change challenge facing the world in this century. China's Electrical
Vehicles (EVs) industry is the first to cross the green premium into the
commercialization stage, prompting its market size to exceed that of the US and
EU combined, making it the most inspiring case in global carbon reduction
practices. This study, which is based on first-hand data from industry research
and innovatively constructs a multi-factor green premium model for EVs based on
Total Cost of Ownership (TCO) analysis, finds that EVs currently have a higher
green premium than Internal Combustion Engine Vehicles (ICEVs) and is expected
that short-range EVs will be the first to achieve parity in acquisition costs
by 2025 and long-range EVs by 2030. Further, this paper constructs a
generalized Bass diffusion model considering the green premium, selects the
time series data of EVs diffusion in the Chinese market from 2010-2021, and
uses a genetic algorithm to fit the parameters to predict the EVs market
penetration in the next ten years under different scenarios. The model
prediction results show that EVs are successful innovative diffusion products
and the market penetration rate depends largely on their green premium. The
Chinese EVs market may experience a slowdown or even a decline in growth in the
short term, but will maintain high growth in the medium to long term, with
annual sales expected to reach 10.77 million units by 2030 and a penetration
rate of about 39%.
