The impact of electric vehicle penetration: A recursive dynamic CGE analysis of China

• Published in: Energy economics Vol. 94; p. 105086
• Main Authors: Lin, Boqiang, Wu, Wei
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier B.V 01.02.2021; Elsevier Science Ltd
• Subjects: Alternative fuel vehicles; Carbon dioxide; Economic development; Economic impact; Economics; Electric vehicle; Electric vehicles; Electricity; Emissions; Empirical analysis; Energy economics; Energy security; Environmental protection; Equilibrium; Fossils; Impact analysis; Mitigation; Nitrogen oxides; Oil; Oil demand; Ownership; Penetration; Petroleum; Photochemicals; Power structure; China; Oil demand; C68; L94; L62; Electric vehicle; Economic impact; Emissions
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2020.105086

China is now the largest oil importer in the world. In 2018, the external oil dependence of China exceeded 70%. Restrain the oil consumption is important for China's energy security and environmental protection. The electric vehicle is considered to be the main method to solve these problems. This paper adopts a logistic model to depict the growth path of vehicle ownership. Base on the empirical results, a recursive computable general equilibrium model is constructed to predict future oil demand and simulate the impact of electric vehicles on oil demand, macro-economic, and emission. The result reveals that the development of electric vehicles can make China's oil demand peak in 2029. The increase in electric vehicle penetration rate can positively promote the economic output and reduce nitrogen oxide emissions. Though the carbon emissions will increase under the current power structure, the development of electric vehicles may provide enormous CO2 mitigation potential if the non-fossil energy can dominate the electricity structure in the future •China's oil consumption can achieve peak at 2028 with the development of EV.•The growth of EV has a stimulating effect on the domestic economy.•NOx emission will decline but CO2 emission may increase under current structure.•The carbon emissions will increase under current power generation structure.•The adoption of EV and power generators transformation should be simultaneous.