Electric vehicle adoption and local PM2.5 reduction: Evidence from China

Abstract

A major objective of promoting the adoption of electric vehicles (EVs) is to reduce emissions of PM2.5, one of the most common air pollutants. To better understand the environmental benefits of EVs, we initiate an empirical investigation on how EV adoption affects PM2.5 concentrations. We are also among the first to explore the moderating effects of two meteorological factors, i.e., air temperature and precipitation, and two socioeconomic factors, i.e., industrial activities and province size, on the link between EV adoption and PM2.5 concentrations. Basing on a unique panel data that comprises the PM2.5 concentrations and EV sales of 31 provinces in China, we employ a two-way fixed effects regression model for empirical estimation. Findings demonstrate that EV adoption can significantly alleviate PM2.5 pollution, as 1 additional unit of EV sales can reduce 1.75 × 10−5 μg/m3 of PM2.5. However, the effect of PM2.5 reduction by EV adoption weakens with increasing EV penetration. Further, our estimation indicates that all meteorological and socioeconomic factors can weaken the negative relationship between EV adoption and PM2.5 concentrations. Our research provides evidence-based guidance for policymakers and automakers to devise EV promotion strategies that maybe more effective in mitigating PM2.5.