Electric vehicles and carbon neutrality in the EU: An empirical analysis of transition pathways

• The study examines how electric vehicle (EV) adoption influences carbon neutrality in the EU. • The findings show that EV adoption significantly enhances carbon neutrality, whereas higher electricity prices weaken this effect. • Tax incentives, purchase incentives, and public charging stations jointly strengthen the carbon-reducing impact of EV uptake, highlighting the importance of coordinated policies. • Robust estimators consistently validate the results, confirming a strong policy–technology interaction in achieving decarbonisation goals. • The study underscores the need for harmonised tax frameworks, expanded charging networks, and long-term stable incentives to support the EU’s 2050 carbon-neutrality pathway. The EU goal of carbon neutrality by 2050 has been acknowledged to represent one of the most ambitious attempts at mitigating climate change globally. Carbon emissions related to fossil fuel consumption originate largely from the transport sector. Electric vehicles can be identified as among the key measures associated with efforts to redirect transport systems towards sustainable paths. It is against this background that this study seeks to examine how electric mobility helps in moving towards carbon neutrality in EU. The dataset covers the period between 2010 and 2023. For more robust capture of the dynamic processes involved, Kinky Least Squares together with System Generalised Method of Moments techniques has been used in carrying out analysis. Results show that electric vehicles offer an important contribution to carbon neutrality in Europe. Also, incremental electricity prices tend to lower carbon emissions. We found additional evidence showing that public charging stations, tax incentives, and purchase subsidies help electric mobility contribute to carbon neutrality. We recommend that there is an important need for an overall policy environment that tackles structural and investment impediments affecting the transformation of electric vehicles within Europe.