Does the new energy vehicles policy promote urban carbon unlocking? The case of China

Carbon lock-in has become a significant barrier to Chinese green development, and carbon unlocking plays a crucial role in accelerating the achievement of the ”dual carbon” strategy. Based on panel data of 271 cities from 2006 to 2022, this study empirically examines the impact of new energy vehicles (NEVs) policy on the carbon unlocking through the difference-in-differences (DID). Furthermore, we investigate the policy’s transmission mechanisms and heterogeneity effects. The results are as follows: (1) The NEVs policy leads to 0.010 units increase in the urban carbon unlocking index. (2) The NEVs policy indirectly improves the carbon unlocking through the economic scale effect and the industrial structure upgrading. Additionally, environmental regulation acts as a facilitating factor, amplifying the positive impact of NEVs policy on urban carbon unlocking. (3) The effects of NEVs policy on the carbon unlocking exhibit regional variations, with the strongest effects observed in non-resource-based cities and small cities. Moreover, this impact differs across carbon unlocking quantiles, with more pronounced effects at higher quantile levels.