Electric vehicles and carbon emission intensity: cross-country evidence using extended STIRPAT and System GMM frameworks
Shuyang Wang, Lim Thye Goh, Santha ChenayahPurpose
The present study aims to investigate whether electric vehicle (EV) penetration reduces carbon emissions across 32 major electronic vehicle (EV)-adopting economies between 2010 and 2023. The study evaluates the relationship between EV diffusion and carbon emission intensity (CEI) while accounting for economic development, energy consumption (EC), the share of renewable electricity and urbanisation. By comparing EV stock and EV sales, the study also examines whether sustained EV penetration generates stronger decarbonisation benefits than short-term market expansion.
Design/methodology/approach
The study applies an extended Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) framework and estimates dynamic panel models using the system generalised method of moments (System GMM). EV stock and EV sales are used as alternative indicators of EV penetration to improve robustness and reduce measurement bias. The control variables include gross domestic product (GDP) per capita, primary EC, renewable electricity share, urbanisation, population density and research and development (R&D) expenditure. Model validity is evaluated using benchmark comparisons and standard System GMM diagnostic tests. Heterogeneity analysis is conducted for high-income and middle-income economies.
Findings
EV penetration is significantly associated with lower CEI, indicating that transport electrification supports decarbonisation. Both EV stock and EV sales exhibit significant negative associations with CEI. While the estimated coefficient for EV stock is slightly larger in magnitude than that for EV sales, the difference is modest, suggesting that both sustained fleet transformation and ongoing market expansion contribute to carbon mitigation. Primary EC and urbanisation increase CEI, while GDP per capita and the share of renewable electricity reduce it. The mitigation effect is stronger and statistically significant in high-income countries but weaker in middle-income economies. Interaction analysis further shows that EV mitigation weakens with urbanisation but strengthens with a higher share of renewable electricity.
Research limitations/implications
The study focuses on 32 major EV-adopting economies, which may limit generalisation to low-adoption countries. Data limitations prevent the direct measurement of grid-level carbon intensity, charging behaviour and supply-chain emissions. The log-linear specification also assumes constant elasticities and does not test for threshold effects. Future studies could incorporate nonlinear models, grid-specific emission factors and policy variables, such as EV subsidies, carbon taxes and fuel-economy standards. Mediation analysis may further clarify whether EV penetration affects carbon intensity directly or indirectly through changes in electricity demand and energy structure.
Practical implications
The findings suggest that EV strategies should support both sustained fleet penetration and ongoing market adoption, with accumulated EV stock showing a slightly larger estimated benefit. EV deployment should also be coordinated with power sector decarbonisation, as the electricity generation structure strongly influences mitigation outcomes. Urbanisation-driven carbon pressure implies that EV adoption must be integrated into low-carbon urban mobility planning. Policymakers should strengthen innovation governance to ensure that R&D incentives translate into environmental improvements and adopt development-sensitive EV policies that reflect differences in infrastructure readiness and energy systems across countries.
Social implications
The study highlights that EV adoption can support climate action, but its benefits remain uneven across countries and development stages. Middle-income economies may face affordability and infrastructure constraints that weaken decarbonisation outcomes. Because urbanisation increases carbon intensity, EV diffusion alone cannot fully offset emissions pressure from expanding cities. The findings emphasise the social importance of coordinated energy and transport transitions, equitable infrastructure development and broader access to low-carbon technologies to avoid widening sustainability gaps between developed and developing economies.
Originality/value
This study provides cross-country evidence on EV-driven decarbonisation using a dynamic extended STIRPAT framework. By linking EV penetration directly to CEI and comparing EV stock with EV sales, the study shows that both accumulated EV stock and current EV sales are associated with lower carbon intensity, with EV stock exhibiting a slightly larger estimated effect. The analysis further incorporates renewable electricity share, urbanisation and income-group heterogeneity, showing that EV mitigation effects are concentrated in high-income economies. The study offers policy-relevant insights into the structural conditions required for EV transitions to reduce carbon intensity effectively.