Do new energy vehicles reduce carbon emissions?A quasi-natural experiment using China's Ten Cities, Thousand Vehicles project

In the context of China's low-carbon transformation, new energy vehicles are the highlight of low-carbon transformation in the transportation sector. In 2009, China kicked off new energy vehicle promotion through the Ten Cities, Thousand Vehicles project, which has achieved remarkable results(According to the research policy regulations, this article defines new energy vehicles as pure electric vehicles, plug-in hybrid electric vehicles, and fuel cell vehicles). Using panel data of 280 prefecture-level cities in China from 2006 to 2019, this study employs a multiperiod difference-in-differences (DID) model to evaluate the impact of the project on urban carbon emissions, with three notable results. (1) After controlling for time fixed effect and city fixed effect, after the implementation of the policy, the average carbon emissions of the cities in the treatment group increased significantly by 0.67 million tons compared with the control group without the implementation of the policy (p < 0.01). (2) The mechanism analysis indicates that the promotion of new energy vehicles in China has increased the demand for urban electricity consumption. Under the power structure dominated by thermal power generation, this has shifted the carbon emissions from the transportation sector to the power sector, thereby increasing the carbon emissions of cities. (3) Heterogeneity analysis demonstrates that urban power structure, resource endowment, and geographical factors affect new energy vehicles' carbon emissions reduction effect, and a high proportion of thermal power generation, poor resource endowment, and new energy vehicle promotion in the western region has increased urban carbon emissions. Therefore, when developing policies, the government should consider all aspects of new energy vehicles, from production to recycling, from the whole life cycle perspective, promote the power industry's green transformation, and improve clean energy power generation efficiency to fully leverage new energy vehicles' carbon emissions reduction effect.