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.