Sustainable Wheels of Fortune: Understanding the Asymmetric Bond between Green Finance and Electric Vehicle Adoption

Abstract

Over the past few years, there has been a growing convergence of energy and environmental challenges globally, necessitating decisive actions. In response to these imperatives, countries have embraced electric vehicles as a transformative solution. This study probes the connection between green finance and electric-vehicle adoption in the top 10 economies with the greatest stock of electric vehicles. Previous investigations employing panel-data tools established consistent findings about the green-finance/electric-vehicle nexus. However, some countries exhibit distinct relationships. Using the quantile-on-quantile methodology, we analyze the time-series interdependence within individual countries, providing insights into the variables’ asymmetric association. The findings show that green finance positively influences the electric-vehicle stock in certain economies, specifically at distinct points within the data distribution, each characterized by its unique traits. The findings emphasize the significance of green finance measures in promoting widespread electric-vehicle adoption, contributing to environmental sustainability, and fostering a shift toward low carbon consumption.