Asymmetric Impacts of EU ETS Fluctuations on New Energy Vehicle Supply Chain Resilience: NARDL Approach

Abstract

The transition toward a low-carbon economy has positioned the New Energy Vehicle (NEV) sector as a pivotal component of global industrial strategy. However, the resilience of the NEV supply chain is increasingly challenged by the volatility of carbon pricing mechanisms, particularly the European Union Emissions Trading System (EU ETS). This study investigates the asymmetric impacts of EU ETS price fluctuations on NEV supply chain resilience using a Non-linear Autoregressive Distributed Lag (NARDL) approach. Unlike traditional linear models, which assumesymmetric responses to positive and negative shocks, this research posits that the NEV supply chain reacts heterogeneously to carbon price hikes versus declines. utilizing monthly data covering theoperational phases of the EU ETS, we decompose carbon pricemovements into partial sum processes of positive and negative changes. The empirical results confirm the existence of a long-run cointegrating relationship between carbon prices and supply chain resilience. Crucially, the findings reveal significant asymmetry: positive shocks to carbon prices exert a pronounced negative impact on supply chain resilience by escalating operational costs and raw material volatility, whereas negative shocks do not yield a statistically equivalent improvement in resilience due to cost stickiness and investment lag. These findings provide critical insights for policymakers aiming to stabilize carbon markets and for industry stakeholders managing supply chain risks in a volatile regulatory environment.