Abstract: With the continuous fermentation of the “cheat up” incident in the new energy automobile industry, the relevant departments decided to completely stop the subsidies for promotion and application of new energy vehicles in 2020, and the “Parallel Management Measures for the Average Fuel Consumption of Passenger Vehicle Enterprises and New Energy Vehicle Points” (hereinafter, the “double integral policy”) will continue to lead the development of the industry. However, the industry still has doubts about the double integral policy: Can the “improvisation” policy promote the market-oriented operation of China’s new energy auto industry which is highly dependent on the policy with the opening market, and whether the “mileage is king” assessment mechanism can continuously drive independent R&D in the field of new energy automobile in China to enhance product competitiveness? Today, upon the coming of foreign brands, lack of key technologies caused by lack of independent R&D are subject to the disadvantages of China’s new energy automobile industry. Therefore, how will the double integral policy affect the R&D investment of new energy auto companies? Second, what kind of policy should the government combine with the double integral policy to encourage independent R&D? Finally, what is the effectiveness of the R&D investment stimulus policy under the double integral policy? How could it be implemented? Answering these questions is critical to ensuring the healthy growth of the new energy automobile industry. With the gradual development of intelligence, networking and sharing, the new energy automobile industry will profoundly change our lives, and vigorously drive technological changes and economic development. Major countries have successively introduced policies to support new energy automobile industry. Looking back at the literature, the research on new energy automobile industry focuses on exploring the shortcomings of existing policies to formulate more effective industrial policies. The exposure of the new energy automobile industry’s “cheat up” incident has led the mainstream view that government failure is the main reason for the deviation of new energy automobile industry policy. Although the double integral policy will dominate the industry development with market mechanisms, the promotion of policies to corporate R&D is not yet known.Under this circumstance, with the combination of R&D subsidy and double integral policy for the new energy automobile industry, it is meaningful to improve the free operation of the market mechanism while improving the new energy automobile industry policy system dominated by the double integral policy. Although relevant research also proposes that China should increase the policy supply for the basic research and development of new energy automobile industry, increase funding, encourage independent R&D, technological innovation, to enhance industrial competitiveness, occupy new technology routes, but only propose suggestions about R&D subsidy. There are no subsidized methods and paths. China has a R&D policy supply for the new energy automobile industry since the "863" and "973" programs, but there are two main problems: First, the scale is small, compared with the subsidies for financial promotion and application, the amount of R&D subsidy is small, secondly the coverage is not comprehensive, the future mainstream technology of new energy automobile is difficult to determine in a short time. It is difficult to cultivate long-term industrial competitive advantages only for research project based on R&D funding for specific technology routes.Based on this, this paper constructs a three-stage game model in which the new energy vehicle supplier manufacturer decides the R&D investment level, the supplier output competition and the manufacturer output competition under the double integral policy with R&D subsidy, explaining the impact of the positive integral price and market scale on R&D investment and the mechanism of R&D subsidy.The research shows that: (1) when the double integral policy is used alone, the R&D investment of new energy auto companies will increase with the increase of the positive integral price and market size before the vertical R&D overflow rate reaches the threshold. In the form of “market access” regulation, the double integral policy requires manufacturers to compensate for negative integral. Increasing R&D investment in new energy automobile business is the first choice of manufacturers. The demand of manufacturers will also drive R&D investment in the whole industry. However, after the technological innovation strength of new energy auto companies has increased and the vertical R&D spillover rate has reached the threshold, enterprises are more inclined to use R&D achievements to obtain more profits. At this stage, enterprises will reduce R&D investment as the positive credit price and market size increase, and turn to market development.(2) R&D subsidy has a stimulating effect on R&D investment of new energy auto companies within the effective range. The improvement of competitiveness is a process from quantitative change to qualitative change, which requires sustained high intensity investment, and the company bears high risks and uncertainties. The government’s R&D subsidy clarify the direction of industrial development and market development expectations, reduce R&D risks, and enhance the enthusiasm and initiative of R&D investment. (3) The government should inspect the development status of the new energy automobile industry in stages, and adjust the amount of R&D subsidy according to the changes in the vertical R&D spillover rate of new energy automobile industry suppliers and manufacturers, so that the policy role remains in the positive effect range. The combination of R&D subsidy and double integral policy with “reverse spillover rate changes” can promote industrial technology innovation and build competitive advantage while improving market mechanisms.The above conclusions bring the following enlightenment: (1) The industrial policy of new energy automobile should have R&D subsidy face to the core basic components (components), advanced basic processes, key basic materials and industrial technology foundation "four basics" engineering, multi-disciplinary and multi-field motors and batteries, as well as process technology, modular technology, system integration technology, innovative design, software development for research and design testing, and R&D of standards, especially international standards, form the core competitiveness of China’s new energy automobile industry. (2) Emerging industrial policies should be re-evaluated according to the stage of industrial development and market performance, focusing on solving the “reverse selection” and “moral hazard” problems arising from information asymmetry in the implementation process, avoiding structural deviations of industrial policies and ensuring the incentive process. Ensure the controllability of the incentive process and improve the resource allocation of emerging industries to the Pareto optimal state.

Key words: new energy vehicle, R&D subsidy, R&D investment