Fiscal incentives and performance assessment of heat pump–based management systems in electric vehicles under diverse environmental conditions

In China’s rapidly expanding electric vehicle (EV) market, fiscal incentives have played a decisive role in bridging the gap between technological advances and consumer adoption. This study evaluates the thermal performance of heat pump (HP)–based management systems for Battery Electric Vehicles (BEVs) under diverse environmental conditions, situating the analysis within China’s policy landscape of purchase subsidies, tax exemptions, and carbon credit mechanisms. Using a digital twin approach with the GT-Suite platform and experimental validation between 2019 and 2024, we compare HP systems with conventional Positive Temperature Coefficient (PTC) air conditioning. Results show that HP integration improves vehicle range by up to 20% in cold climates, while optimized battery preconditioning adds further efficiency gains of 7% at –11 °C and 5% at –21 °C. The substitution of propane for high-GWP enhances environmental performance and aligns with China’s low-carbon transition goals. Yet higher initial costs remain a barrier, underscoring the importance of fiscal measures such as direct purchase subsidies for HP-equipped vehicles, VAT exemptions for low-GWP refrigerants, and differentiated vehicle registration fees that reward energy-efficient platforms. By linking technical outcomes with the fiscal policy toolkit, this study demonstrates that coordinated incentives can shorten payback periods, stimulate consumer demand, and encourage manufacturers to accelerate thermal system innovation. The findings contribute to China’s “dual carbon” strategy by showing how fiscal incentives, coupled with advanced thermal technologies, can deliver energy efficiency gains, emissions reductions, and stronger market competitiveness for the next generation of electric mobility.