Fiscal Strategies for Sustainable Transition: Addressing Revenue Challenges and Infrastructure Investment

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This research examines the fiscal challenges and potential solutions associated with the global transition to electric vehicles. Electric vehicle adoption is accelerating, and governments need more revenues from traditional fuel taxes while simultaneously needing to invest in charging infrastructure. The research examines possible tax strategies to reduce the budget deficit and provide long-term finance for transportation projects. It also emphasizes the importance of considering both tax policies’ short- and long-term impact on electric vehicle deployment and environmental goals. The research shows that phasing in taxes on electric vehicles, such as road tolls, mileage fees, battery production taxes, and electricity use taxes, can effectively offset lost revenues from fuel taxes. By proactively implementing such policies, governments may help smooth the transition to electric vehicles, ensure financial stability, and create a cleaner, more sustainable transportation system.