Abstract The purpose of this study is to understand the effects of the influential factors that affect the sustainable development of new energy vehicle in China, investigate the cause-effect relationships among them, and propose some appropriate policies and efficacious measures for the policy-makers to promote its sustainable development. Interpretative Structuring Modeling was used to identify the critical factors affecting the sustainability of China’s new energy vehicle industry and to find the potential relationships among the factors; subsequently, fuzzy Decision Making Trial and Evaluation Laboratory was employed to investigate the cause-effect relationships among the influential factors and to prioritize these factors. The results reveal that technological maturity, technological standards for new energy vehicles, and funds on R&D of new energy vehicles are the three most important driving factors for promoting the sustainable development of new energy vehicle industry of China. Some implications were also proposed for China’s authority. The success factors and strategic implications of new energy vehicles in China were investigated in a multi-criteria analysis approach.