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

We investigate the effect of the adoption of electric vehicles (EVs) on CO emissions using spatial econometric models and have three findings. First, there are spatial spillover effects of EV adoption on CO emissions, implying that the CO 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 CO emissions locally by 0.096% and by 0.087% in a nearby city. Second, EVs indirectly impact CO emissions through the substitution effect, energy consumption effect, and technological effect. The overall impact of EV adoption on CO emissions is negative. Finally, we demonstrate the moderating effect of urban energy structure on EVs' CO 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.