How does adoption of electric vehicles reduce carbon emissions? Evidence from China

We investigate the effect of the adoption of electric vehicles (EVs) on CO2 emissions using spatial econometric models and have three findings. First, there are spatial spillover effects of EV adoption on CO2 emissions, implying that the CO2 mitigation of a city depends on local sales of EVs and sales of EVs in neighboring cities. A 1% increase in the sale of EVs in a city can reduce CO2 emissions locally by 0.096% and by 0.087% in a nearby city. Second, EVs indirectly impact CO2 emissions through the substitution effect, energy consumption effect, and technological effect. The overall impact of EV adoption on CO2 emissions is negative. Finally, we demonstrate the moderating effect of urban energy structure on EVs’ CO2 emissions mitigation. A 1% increase in the proportion of renewable energy generation increases the decarbonization of EVs by 0.036%. These findings provide policy implications for the coordinated development of EV market and energy system.