Price Elasticity of Demand in Electric Vehicle Industry

This study explores the price elasticity of demand (PED) in electric vehicle industry in China. As the new-energy vehicle industry becomes popular, it is important for people to learn consumers’ purchasing behaviors. The data used to calculate PED is the sales and prices of new-energy vehicles in China from February 2023 to May 2025.

Two methods are used in this study to find out the exact value of PED in each month. This study uses the definition formula, linear regression, and the combination of PED and derivatives to find out the exact value of PED. After calculating out the results, this study makes a conclusion that the PED of electric vehicle industry in China is relatively elastic.

Based on the property of elasticity, the paper gives some suggestions to help increase the sales of electric cars. If there are more and more people are willing to buy the electric vehicles, it can help protect the environment. That is because the electric cars are environmental-friendly.