Assessing the Cost-effectiveness of Carbon Neutrality for Light-duty Vehicle Sector in China

China’s progress in decarbonizing its transportation, particularly vehicle electrification, is notable. However, the economically effective pathways are underexplored. To find out how much cost is necessary for carbon neutrality for the light-duty vehicle (LDV) sector, this study examines twenty decarbonization pathways, combining the New Energy and Oil Consumption Credit model and the China-Fleet model. We find that the 2060 zero-greenhouse gas (GHG) emission goal for LDVs is achievable via electrification if the battery pack cost is under CNY483/kWh by 2050. However, an extra of CNY8.86 trillion internal subsidies is needed under pessimistic battery cost scenarios (CNY759/kWh in 2050) to eliminate 246 million tonnes of CO2-eq by 2050 ensuring over 80% market penetration of battery electric vehicles (BEVs) in 2050. Moreover, the promotion of fuel cell electric vehicles is synergy with BEVs to mitigate the carbon abatement difficulties, decreasing up to 34% of the maximum marginal abatement internal investment.