Toward carbon reduction in electric vehicle products: Evidence from China's recommended catalogue policy

Abstract

Electric vehicles (EVs) are widely believed to be the most promising solution to reduce carbon emissions in the transportation sector. In China, entering the recommended catalogue is the basis for vehicle manufacturers and EV models to obtain market qualification and government subsidies. Based on the monthly data of China's recommended catalogue from January 2017 to December 2022, this study analyzes the impact of the recommended catalogue policy on carbon emissions of EVs at the micro-product level. We find that the recommended catalogue policy significantly reduces carbon emissions of EV products. Mechanism analysis indicates that this policy achieves carbon reduction in EV products by promoting sales growth, stimulating industry competition, and incentivizing technological innovation. Heterogeneity analysis shows that the recommended catalogue policy reduces carbon emissions of electric sedans, while the effect on SUV/MPV models is insignificant. The carbon reduction effect of this policy is only effective for EVs produced by non-state-owned enterprises, whereas no such effect is observed for state-owned enterprises. Further discussion reveals that the recommended catalogue policy and the dual credit policy play a synergistic role in reducing carbon emissions of EV products. The findings provide policy implications for the low-carbon development of EVs in the transportation sector.