How import tariffs on China's new energy vehicles affect host countries’ energy transition

The global energy transition increasingly relies on new energy vehicles (NEVs) to facilitate renewable energy integration. China's exports of NEVs play a pivotal role in addressing the rising global energy transition demand. As economies are imposing tariffs on imported China's NEVs to protect their own domestic industries, a critical question remains underexplored: do these tariff policies shape host countries’ energy transition? This study employs a panel threshold model to investigate the threshold effect of import tariffs targeting China's NEVs on the share of renewable energy in primary energy use. Using panel data from 103 economies over 2017–2023, we confirm the existence of a critical threshold. Below this level, tariffs positively influence energy transition by complementing domestic NEV research and development (R&D), reducing R&D costs and enabling greater investment in transition initiatives. Beyond the threshold, tariffs hinder energy transition by limiting NEV imports and redirecting resources toward costly domestic NEV R&D, which crowds out energy transition fundings. The findings highlight the importance of optimal tariff design, particularly for low-income economies, to balance protection of domestic NEV industries with the need to leverage technology spillovers and accelerate energy transition.