Abstarct: In view of the increased concerns associated with environmental problems and energy resources, a lot of discussions have arisen about overcoming problems such as global warming, air pollution and limited fossil fuel resources. In recent years, electric vehicles utilization in transportation sector has received more attention as a solution. In this thesis, first, the factors affecting electric vehicle sale are introduced. Then, using system dynamic method, a dynamic simulation model is proposed to study and analyze the process of diffusion of electric vehicles. Considering socio-economic and technological factors and their interactive effect, the proposed model forecasts electric vehicle sale for the text three decades. Furthermore, the impact of electric vehicle utilization on energy and environmental sectors is assessed. Finally, after discovering factors exerting the most influence on electric vehicle sale, a few incentive approaches are discussed to increase the use of electric vehicles.