Energy-efficient vehicles market is developing under different factors. Government subsidies are a fundamental tool for developing a particular sector or particular company as a segment of the economy. One type of government subsidy is the funding of energy-efficient vehicle purchases. Given that more emphasis has recently been placed on environmental protection, such subsidies aim is to encourage cleaner transport and reduce air pollution. It is planned to gradually replace the production of internal combustion vehicles with more environmentally friendly vehicles that produce significantly less harmful effects on the environment. To further encourage the purchase of energy-friendly vehicles, European countries, including Croatia are allocating more financial resources specifically for such vehicles. Following the above, the subject of the thesis was an analysis of government incentives and the market for more energy-efficient vehicles in the Republic of Croatia. The thesis aim is to determine the impact of government incentives on the development of the more energy-efficient vehicles market with special emphasis on the Republic of Croatia using regression analysis. For the regression analysis, the following secondary data were collected: the number of electric and hybrid vehicles, the amount of government incentives for environmental protection, GDP per capita, the volume of road traffic and the values of Ecological footprint for the period from 2010 until 2020 for the Republic of Croatia. The calculated coefficient with the government incentive variable showed that the increase in incentives has a positive impact on the number of energy-efficient vehicles. Also, all other variables included in the model proved to be significant when explaining the trend in the number of more energy-efficient vehicles. Finally, government subsidies not only in the Republic of Croatia but also in the world contribute to the further growth of the energy-efficient vehicles market. To continue the further growth of the market, it is necessary to overcome the obstacles that are listed and analyzed in the paper.