Can new energy vehicles help to achieve carbon neutrality targets?

In the reforms pertaining to the energy structure in the automotive industry, new energy vehicles (NEVs) have long been the focus of government attention, as an effective means to reduce air pollution. Therefore, this paper employs the rolling-window Granger causality test, in order to discuss the environmental benefits of new energy vehicles, so as to explore the active role of the transportation sector in reducing air pollution. By studying the interactions between NEVs and particulate matter (PM2.5) from the time period spanning from 2013:M1 to 2020:M9, we have found that the positive influences from NEVs to PM2.5 ascertain that NEVs cannot be considered as an efficient measure to mitigate air pollution. Moreover, these results are not supported by the energy and environment interaction model, which essentially indicates that replacing traditional energy with renewable energy is an effective measure for controlling environmental pollution. In fact, PM2.5 tends to have a negative impact on NEVs, which underlines that the air quality index is a leading indicator, particularly when it comes to analyzing the development of the NEVs market. This essentially highlights that in China, NEVs still do not account for a high proportion of car sales, and therefore, its environmental protection effect is not obvious. At the same time, the factor of public awareness regarding environmental protection will thus occupy a considerable proportion in the transmission of NEVs sales. These revelations will help the government to formulate environmental governance policies, and expand the new energy vehicle market to achieve carbon neutrality targets in China.