China has realized fast development in the new energy vehicle industry during the past several years and has become the main force around the world, which can be attributed to industrial policies. We mainly investigate the policy-making mechanism that promotes the development of this industry. Based on the industrial policies enacted since 2012, we find that the synergy of the central government’s policy and the local government’s policy is the main mechanism contributing to the fast development of this industry. From the perspective of industrial innovation ecosystem, this paper analyzes the formulation mechanism of local policies after the promulgation of central policies and the further updating and iteration of central policies. Notably, the synergy modes of local governments are distinct in terms of different actors (focal firms, suppliers, demands, complementors, and research and development actors) in the industrial innovation ecosystem, including equal synergy, intensification synergy and selective synergy. The synergy mechanism also demonstrates that there is a trial process before the dominant policy system forms. Our research provides insightful suggestions for future policymaking in emerging industries.