The impact of electric vehicle adoption on regional energy market integration in China

Qian Cheng, Yongqing Xiong and Jinghui Liu

Asian Economic Journal, 2025, vol. 39, issue 2, 217-244

Abstract: The widespread adoption of electric vehicles (EVs) has sparked significant interest in its potential to transform the energy landscape. This study examines the impact of EV adoption on regional energy market integration (EMI) based on data from China, and combines with threshold models to explore the mechanism in terms of electricity consumption, supply, and generation side. We find that EV adoption promotes China's EMI, and this effect remains robust after addressing endogeneity issues and conducting a series of robustness tests. Moreover, EV adoption has threshold effects on EMI, which is manifested as a single threshold effect of energy system electrification, a single threshold effect of inter‐provincial electricity trading, and a double threshold effect of renewable energy generation. The maximum benefits can be achieved when these factors exceed certain threshold values. Further analysis reveals that electricity system reform and EV subsidy policies positively moderate the effect of EV adoption on EMI, and EMI exhibits benefits in reducing market concentration and decreasing carbon dioxide emissions in the energy sector. These findings offer valuable insights into how the increasing prevalence of EVs shapes the broader paradigm of EMI.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bla:asiaec:v:39:y:2025:i:2:p:217-244

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