Can the Promotion of New Energy Vehicles Contribute to Economic Green Development? Evidence from Prefecture-Level Cities in China

Against the backdrop of intertwined economic advancement and ecological governance dilemmas confronting developing economies, this paper centers on the green growth objective embedded within China’s New Energy Vehicle Pilot (NEVP) Policy as its analytical focal point. Adopting the propensity score matching difference-in-differences (PSM-DID) framework, this study empirically evaluates the causal impacts of the NEVP policy on green economic development efficiency. The results indicate that the promotion of new energy vehicles yields a statistically significant improvement in green economic efficiency. Notably, the effect of the NEVP policy is more pronounced in cities with higher levels of economic development. Through mechanism analysis, we find that new energy vehicles play a crucial role in promoting green economic growth and sustainable development. Furthermore, this study also highlights the spatial effects of new energy vehicle promotion on green economic development. This research provides empirical evidence to guide the strategic promotion of new energy vehicles in developing regions to improve environmental quality and underscores the sustainable growth potential of aligning economic and environmental goals.