Reconceptualising Fiscal Policy for Sustainable Mobility: The Role of Government Incentives in Eco-Friendly Vehicle Adoption

Abstract

This study investigates the role of government fiscal incentives in promoting the adoption of eco-friendly vehicles, exploring how targeted subsidies, tax rebates, and regulatory measures can drive sustainable mobility while reducing environmental impact and supporting national climate goals. Amid escalating climate change concerns and urban congestion, governments face urgent pressure to design effective fiscal policies that accelerate eco-friendly vehicle adoption and reduce carbon emissions. The study focuses primarily on fiscal incentives and policy mechanisms influencing consumer adoption of eco-friendly vehicles, without delving into vehicle manufacturing technologies, private sector innovation strategies, or detailed international policy comparisons in depth. Key questions guiding this research include how government fiscal incentives can accelerate eco-friendly vehicle adoption and what economic and behavioural challenges are associated with these measures. Employing a qualitative approach and exploratory study, the research combines literature review, policy and fiscal frameworks analysis to determine how incentives can effectively promote sustainable transportation choices. Findings suggest that strategically designed fiscal incentives can significantly increase eco-friendly vehicle adoption, although their effectiveness depends on clear policy design, market awareness, and consumer responsiveness. Future research may explore long-term behavioural impacts, integration with public transportation policies, and the role of emerging technologies in supporting sustainable mobility.