In this paper, we firstly sort out the national and municipal promotion policies for the NEV industryin China, and then examine the empirical relationship between the policy strength and the sales proportion ofNEVs among the total automobile sales, and finally explore the impact of two promotion policies, includingfiscal subsidy and free license, on consumer demand using sales data of 66 NEV models from Shanghai during2016. Results show that the policy strength is positively related with the NEV sales proportion, and that fiscalsubsidy and free license policies can effectively increase the demand for NEVs. Also, counterfactual analysisindicates that the withdrawal of these two policies will lead to a significant decline of NEV sales. Therefore, it is .necessary to maintain the promotion policies when the NEV market still needs to be enlarged, and if needed, theexit of promotion policies should be designed carefully towards different firms or models.