Impact of Command-and-Control Regulation on the Electrification of Car Sharing Market

• In Event: Double-Edged Swords? Trying to Decrease Carbon from Transportation

Abstract

Transportation electrification is essential to reduce pollution and mitigate the greenhouse effect. Despite the wealth of incentives already in place to promote the new energy vehicle market, however, the effectiveness of command-and-control regulatory interventions by the government to promote new energy vehicles in the car sharing market is not yet known. In this paper, we conduct a quasi-natural experiment using the administrative order issued by each city to "set new energy vehicles as the entry threshold for registration of ride-hailing vehicles". We examined the impact of this executive order on the sales of new energy rental cars using a staggered DID approach and an instrumental variables approach. The results of this paper show that command-and-control regulation can significantly promote the electrification transition in the car sharing market, leading to a 64.4% increase in the sales of new energy rental cars. It has a more pronounced effect in western regions, non-central cities, and resource-based cities. The executive order can increase sales of new energy rental vehicles through channels that increase the construction of charging facilities, increase brand richness in the market, and equalize urban and rural development. The replication of the regulation is more effective in cities with high climate policy uncertainty, high governmental environmental concerns, and high innovation dynamics. Command-and-control regulation has a stronger boosting effect on sales of pure electric rental cars and a dampening effect on sales of other fuel-type new energy rental cars such as hybrids. This paper identifies the positive impacts of government executive order interventions on the electrification of the car sharing market and provides some decision support for the transformation of transportation electrification.

Authors

• Haowen Dong, Harbin Institute of Technology
  Presenting Author

• Jing Liang, Harbin Institute of Technology
  Non-Presenting Co-Author