Has the special license plate promoted the adoption of electric vehicles? A quasi-natural experiment from China

The implementation of incentive policies has proved its importance in promoting the adoption of electric vehicles (EVs). In response, China’s government introduced a series of preferential measures aimed at speeding up the widespread adoption of EVs to replace traditional internal combustion engine vehicles (ICEVs). This study employs a panel data of 248 cities across China, spanning the period from 2016 to 2019, and utilizes a Difference-in-Differences (DID) approach to examine the impact of the Special License Plate for New Energy Vehicles (SPNEV) policy on the promotion of EVs. The results show that the SPNEV has a significant positive impact on EV sales among both individuals and institutional owners, with estimated increase in sales of 37.8% and 35%, respectively. Notably, the policy is more pronounced in cities subject to driving restrictions on ICEVs and those experiencing heavy traffic pressure. Furthermore, the findings suggest that the SPNEV plays a beneficial role in cities characterized by lower temperatures, second-tier and third-tier economic development levels, and smaller urban populations. These findings contribute meaningfully to the existing body of empirical evidence on the efficacy of incentives in facilitating low-carbon transformation in the transportation sector across diversified national settings.