Like many cities around the world, New York City is establishing policies to reduce CO2 emissions from all energy sectors by 2050. Understanding the impact of varying degrees of electric vehicle adoption and CO2 intensities on emissions reduction in the city is critical. Here, using a technology-rich, bottom-up, energy system optimization model, we analyse the cost and air emissions impacts of New York City's proposed CO2 reduction policies for the transportation sector through a scenario framework. Our analysis reveals that the electrification of light-duty vehicles at earlier periods is essential for deeper reductions in air emissions. When further combined with energy efficiency improvements, these actions contribute to CO2 reductions under the scenarios of more CO2-intense electricity. Substantial reliance on fossil fuels and a need for structural change pose challenges to cost-effective CO2 reductions in the transportation sector. Here we find that uncertainties associated with decarbonization of the electric grid have a minimum influence on the cost-effectiveness of CO2 reduction pathways for the transportation sector.