Effects of providing total cost of ownership information on consumers’ intent to purchase a hybrid or plug-in electric vehicle

Energy-saving technologies have a difficult time being widely accepted in the marketplace when they have a high initial purchase price and deferred financial benefits. Consumers might not realize that, in the long-run, the financial benefits from reduced energy consumption offset much or all of the initial price premium. One strategy to address consumer misconception of this advantage is to supply information on the “total cost of ownership”, a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period. In this article, we investigate how providing information on five-year fuel cost savings and total cost of ownership affects the stated preferences of consumers to purchase a gasoline, conventional hybrid, plug-in hybrid, or battery electric vehicle. Through an online survey with an embedded experimental design using distinct labels, we find that respondent rankings of vehicles are unaffected by information on five-year fuel cost savings. However, adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a conventional hybrid, plug-in hybrid, or a battery-electric vehicle. No such effect is found for consumers of small sport utility vehicles. Our results are consistent with other findings in the behavioral economics literature and suggest that further evaluation of the effects of providing consumers with information on the total cost of vehicle ownership is warranted.     

Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China

We model consumer preferences for conventional, hybrid electric, plug-in hybrid electric (PHEV), and battery electric (BEV) vehicle technologies in China and the U.S. using data from choice-based conjoint surveys fielded in 2012–2013 in both countries. We find that with the combined bundle of attributes offered by vehicles available today, gasoline vehicles continue in both countries to be most attractive to consumers, and American respondents have significantly lower relative willingness-to-pay for BEV technology than Chinese respondents. While U.S. and Chinese subsidies are similar, favoring vehicles with larger battery packs, differences in consumer preferences lead to different outcomes. Our results suggest that with or without each country’s 2012–2013 subsidies, Chinese consumers are willing to adopt today’s BEVs and mid-range PHEVs at similar rates relative to their respective gasoline counterparts, whereas American consumers prefer low-range PHEVs despite subsidies. This implies potential for earlier BEV adoption in China, given adequate supply. While there are clear national security benefits for adoption of BEVs in China, the local and global social impact is unclear: With higher electricity generation emissions in China, a transition to BEVs may reduce oil consumption at the expense of increased air pollution and/or greenhouse gas emissions. On the other hand, demand from China could increase global incentives for electric vehicle technology development with the potential to reduce emissions in countries where electricity generation is associated with lower emissions.     

Consumers’ willingness to pay for alternative fuel vehicles: A comparative discrete choice analysis between the US and Japan

This paper conducts a comparative discrete choice analysis to estimate consumers’ willingness to pay (WTP) for electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) on the basis of the same stated preference survey carried out in the US and Japan in 2012. We also carry out a comparative analysis across four US states. We find that on average US consumers are more sensitive to fuel cost reductions and alternative fuel station availability than are Japanese consumers. With regard to the comparative analysis across the four US states, consumers’ WTP for a fuel cost reduction in California is considerably greater than in the other three states. We use the estimates obtained in the discrete choice analysis to examine the EV/PHEV market shares under several scenarios. In a base case scenario with relatively realistic attribute levels, conventional gasoline vehicles still dominate both in the US and Japan. However, in an innovation scenario with a significant purchase price reduction, we observe a high penetration of alternative fuel vehicles both in the US and Japan. We illustrate the potential use of a discrete choice analysis for forward-looking policy analysis, with the future opportunity to compare its predictions against actual revealed choices. In this case, increased purchase price subsidies are likely to have a significant impact on the market shares of alternative fuel vehicles.     

How will we fund our roads? A case of decreasing revenue from electric vehicles

Annual expenditures for transportation infrastructure have recently surpassed the funding available through tax and fee collection. One large source of revenue generation for transportation infrastructure is use fees that are charged through taxes on gasoline both on a federal and state level. A massive adoption of electric vehicles (EVs) in the United States would result in significantly lower gasoline consumption and thus reduce the revenue collected to maintain the U.S. transportation infrastructure. We investigate how different vehicles will change the annual fee collected on a marginal basis. In addition, we assess the effects of adoption of alternative vehicles on revenues using several projections of alternative vehicles adoption, both on a state-by-state basis and at the national level. We find that baseline midsize and compact vehicles such as the Toyota Camry and Honda Civic generate approximately $2500–$4000 in tax revenue over their lifetime. Under the current funding structure, battery-electric vehicles (BEVs) such as the Nissan Leaf generate substantially less at $400–$1300, while plug-in hybrid electric vehicles (PHEVs) such as the Chevrolet Volt generate $1500–$2700. Even in states with high lifetime fees due to fuel taxes, such as California, revenue generation can be upwards of 50% lower than in states with high registration fees such as Colorado. Total annual revenue generation decreases by about $200 million by 2025 as a result of EV adoption in our base case, but in projections with larger adoption of alternative vehicles could lead to revenue generation reductions as large as $900 million by 2025. Potential schemes that charge user fees on alternative fuel vehicles to overcome the decrease in revenue include a flat annual registration fee at 0.6% of the vehicle’s manufacturer suggested retail price (MSRP) or 2

per mile fee.     

Modeling the effects of congestion on fuel economy for advanced power train vehicles

Fuel-speed curves (FSC) are used to account for the aggregate effects of congestion on fuel consumption in transportation scenario analysis. This paper presents plausible FSC for conventional internal combustion engine (ICE) vehicles and for advanced vehicles such as hybrid electric vehicles, fully electric vehicles (EVs), and fuel cell vehicles (FCVs) using a fuel consumption model with transient driving schedules and a set of 145 hypothetical vehicles. The FSC shapes show that advanced power train vehicles are expected to maintain fuel economy (FE) in congestion better than ICE vehicles, and FE can even improve for EV and FCV in freeway congestion. In order to implement these FSC for long-range scenario modeling, a bounded approach is presented which uses a single congestion sensitivity parameter. The results in this paper will assist analysis of the roles that vehicle technology and congestion mitigation can play in reducing fuel consumption and greenhouse gas emissions from motor vehicles.     

Impact of government incentives on the market penetration of electric vehicles in Australia

Incentives to buy and use electric vehicles (EVs) may influence individuals’ decisions to do so. To examine these impacts, a latent class discrete choice model is developed to analyse consumer preferences related to EV attributes and related government incentives. Data was collected from a stated preference survey of 1,076 residents of New South Wales (NSW), Australia. According to the results, the proposed latent constructs classify respondents into five segments. The segments are then used to distinguish respondent behaviours regarding EV attributes and related government incentives. The results show that rebate on the upfront cost of an EV is the most preferred one-off financial incentive, because EVs are expected to be expensive, especially in Australia which has a very small EV market at present. Furthermore, rebates on energy bills and parking fees are also well-received, as these things are expensive in Sydney, Australia. Thus, operational incentives for discounts on energy bills and parking fees may facilitate the success of EVs in NSW.     

Intent to purchase a plug-in electric vehicle: A survey of early impressions in large US cites

This paper examines consumer stated intent to purchase plug-in electric vehicles and assesses the factors that increase or decrease interest. We surveyed adult drivers in large US cities in early fall 2011, before vehicle manufacturers and dealers began marketing campaigns. The survey responses thus document early impressions of this transport technology. We find that, given current battery technology and public perceptions, overall stated intent to purchase or lease electric vehicles is low. Interest in plug-in hybrid technology is somewhat greater than interest in all-electric technology. Consumers who express early interest in adopting electric vehicles are typically highly educated, previous owners of conventional hybrids, environmentally sensitive, and concerned about dependence on foreign oil. Enhanced fuel economy, the primary tangible advantage of plug-in technology, is recognized as favorable by respondents but fails to exert a strong influence on purchasing intentions. Interest in plug-in electric vehicles is shaped primarily by consumers’ perceptions of electric vehicle disadvantages.     

Advances in consumer electric vehicle adoption research: A review and research agenda

In spite of the purported positive environmental consequences of electrifying the light duty vehicle fleet, the number of electric vehicles (EVs) in use is still insignificant. One reason for the modest adoption figures is that the mass acceptance of EVs to a large extent is reliant on consumers’ perception of EVs. This paper presents a comprehensive overview of the drivers for and barriers against consumer adoption of plug-in EVs, as well as an overview of the theoretical perspectives that have been utilized for understanding consumer intentions and adoption behavior towards EVs. In addition, we identify gaps and limitations in existing research and suggest areas in which future research would be able to contribute.     

A choice experiment on alternative fuel vehicle preferences of private car owners in the Netherlands

This paper presents results of an online stated choice experiment on preferences of Dutch private car owners for alternative fuel vehicles (AFVs) and their characteristics. Results show that negative preferences for alternative fuel vehicles are large, especially for the electric and fuel cell car, mostly as a result of their limited driving range and considerable refueling times. Preference for AFVs increases considerably with improvements on driving range, refueling time and fuel availability. Negative AFV preferences remain, however, also with substantial improvements in AFV characteristics; the remaining willingness to accept is on average € 10,000–€ 20,000 per AFV. Results from a mixed logit model show that consumer preferences for AFVs and AFV characteristics are heterogeneous to a large extent, in particular for the electric car, additional detour time and fuel time for the electric and fuel cell car. An interaction model reveals that annual mileage is by far the most important factor that determines heterogeneity in preferences for the electric and fuel cell car. When annual mileage increases, the preference for electric and fuel cell cars decreases substantially, whilst the willingness to pay for driving range increases substantially. Other variables such as using the car for holidays abroad and the daily commute also appear to be relevant for car choice.     

Consumer preferences for alternative fuel vehicles: A discrete choice analysis

This paper analyzes the potential demand for privately used alternative fuel vehicles using German stated preference discrete choice data. By applying a mixed logit model, we find that the most sensitive group for the adoption of alternative fuel vehicles embraces younger, well-educated, and environmentally aware car buyers, who have the possibility to plug-in their car at home, and undertake numerous urban trips. Moreover, many households are willing to pay considerable amounts for greater fuel economy and emission reduction, improved driving range and charging infrastructure, as well as for enjoying vehicle tax exemptions and free parking or bus lane access. The scenario results suggest that conventional vehicles will maintain their dominance in the market. Finally, an increase in the battery electric vehicles’ range to a level comparable with all other vehicles has the same impact as a multiple measures policy intervention package.     

Forward power-train energy management modeling for assessing benefits of integrating predictive traffic data into plug-in-hybrid electric vehicles

In this paper, a forward power-train plug-in hybrid electric vehicle model with an energy management system and a cycle optimization algorithm is evaluated for energy efficiency. Using wirelessly communicated predictive traffic data for vehicles in a roadway network, as envisioned in intelligent transportation systems, traffic prediction cycles are optimized using a cycle optimization strategy. This resulted in a 56-86% fuel efficiency improvements for conventional vehicles. When combined with the plug-in hybrid electric vehicle power management system, about 115% energy efficiency improvements were achieved. Further improvements in the overall energy efficiency of the network were achieved with increased penetration rates of the intelligent transportation assisted enabled plug-in hybrid electric vehicles.     

Testing electric vehicle demand in ‘hybrid households’ using a reflexive survey

The debate over electric vehicles (EVs) pivots largely on issues of market demand: will consumers purchase a vehicle that provides substantially less driving range, yet can be refueled at home, than an otherwise comparable gasoline vehicle? Also, what role do other unique attributes of EVs play in the purchase decision? Most previous studies find that limited driving range is a serious market barrier; many of those same studies ignore or under-value other novel attributes. To probe these future consumer decision processes deeply and robustly, we first devised and conducted detailed, interactive and experiment-oriented interviews. Then, incorporating what we learned, we designed an innovative mail survey and administered it to 454 multi-car households in California. The four-stage mail survey included a video of EV use and recharging and other informational material, completion of a 3-day trip diary and map of activity locations, and vehicle choice experiments. In addition to propulsion systems, respondents made choices of body styles, driving ranges, and other features. We formalized and tested what we call the hybrid household hypothesis: households who choose EVs will be purposefully diversifying their vehicle holdings to achieve the unique advantages of different propulsion systems. The hypothesis is supported, given the assumptions in our experimental design. In fact, a significantly larger number of EVs are chosen than the minimum number that would support our hypothesis. We find that purchases of battery-powered EVs by hybrid households would account for between 7 and 18% of annual light duty vehicle sales in California. EVs sold to fleets and other households would be in addition to those identified by this study.     

Consumer preferences for electric vehicles in lower tier cities of China: Evidences from south Jiangsu region

China is the world biggest market of electric vehicles (EVs) in terms of production and sales. Existing studies on consumer preferences for EVs in China have generally focused on first-tier cities, while little attention has been paid to the lower tier cities. This exploratory study investigates consumer preferences for EVs in lower tier cities of China, by collecting stated preference (SP) data in two second-tier cities and three third-tier cities in the south Jiangsu region of China. The discrete choice modeling analysis shows that Chinese consumers in lower-tier cities are generally sensitive to monetary attributes, charging service and driving range of EVs. They also perceive Chinese vehicle brands to be disadvantaged compared with European brands. When comparing the differences in second-tier versus third-tier cities, we find that consumers in third-tier cities are more sensitive to purchase price, subsidy of purchase, and coverage of charging stations than their second-tier counterparts. This study also highlights the role of different psychological effects, such as symbols of car ownership, normative-face influence, and risk aversion, in shaping consumer preferences for EVs in lower-tier cities of China. Our results provide important implications for contextualizing government policies and marketing strategies in line with the different sizes and characteristics of the cities in China.     

Consumer attitudes about electric cars: Pricing analysis and policy implications

As electric vehicles (EVs) become more readily available, sales will depend on consumers’ interest and understanding. A survey of consumer attitudes on electric cars was conducted in Manitoba from late 2011 to early 2012. It utilizes two price assessment methods. The van Westendorp price sensitivity method (PSM) shows the acceptable price range for EVs to be $22,000–27,500. This range closely matches average price range for sales of conventional cars during the same period. The willingness-to-pay method reveals consumers are unwilling to pay large premiums for EVs, even when given information on future fuel savings. A consumer group with experience or exposure to EVs is somewhat different. Nearly 25% of these people are willing to pay a premium of up to $10,000. Different interpretations can be drawn from these responses, calling for further research. An apparent policy opportunity involves consumer education to enhance knowledge and facilitate EV purchase decisions. Survey results also support the hypothesis that EV rollout has focused too much on technology, and not enough on consumers.     

Consumer purchase intentions for electric vehicles: Is green more important than price and range?

In view of global warming and climate change, a transition from combustion to electric vehicles (EVs) can help to reduce greenhouse gas emissions and improve air quality. However, high acquisition costs and short driving ranges are considered to be main factors which impede the diffusion of EVs. Since electricity needs to be produced from renewable energy sources for EVs to be a true green alternative, the environmental performance of EVs is also presumed to be an important factor. This paper investigates the role of environmental performance compared to price value and range confidence regarding consumer purchase intentions for EVs. To develop our hypothesis, we interview 40 end-user subjects about their beliefs toward EVs. Then, we perform 167 test drives with a plug-in battery EV and conduct a survey with the participants to test the hypothesis. Results of a structural equation modeling support the hypothesis that the environmental performance of EVs is a stronger predictor of attitude and thus purchase intention than price value and range confidence.     

Assessing carbon reduction effects toward the mode shift of green transportation system

Plans are underway to introduce green transportation systems at Taiwan's famous scenic spot, Sun Moon Lake, to reduce carbon emissions. Carbon reduction effects after changing the current lake tour modes are assessed using a nested logit model with a stated preference survey, which investigated tourists' choice preferences. The empirical results reveal that the modes of electric bus, electric vehicle sharing, and bike are clustered in the same competitive group. Travel cost, in‐vehicle travel time, and out‐vehicle travel time are found to be statistically significant with the expected negative effects. In particular, the attribute of carbon reduction is only significant for green tourists, who are willing to pay US$ 3.5/kg of carbon saved. The result indicates that more efficient carbon reduction is possible by restricting the usage of gasoline vehicles rather than improving the service levels of low‐carbon modes. Notably, the effect of parking charges on emission reduction is equal to the amount of carbon dioxide absorbed by 4511 trees per day. Copyright © 2016 John Wiley & Sons, Ltd.     

Retrofitted plug-in hybrid vehicles: Results of NYIT drive share program

This paper presents results from a plug-in hybrid vehicle drive share program involving retrofitted hybrid electric vehicles. A potential for high fuel efficiency is indicated, however, the average fuel efficiency was only marginally better than conventional hybrid vehicles. This is due to the majority of vehicle miles traveled occurring on trips outside the “all electric” range and very short trips where fuel consumption is dominated by emissions control strategies. The work also considers the availability of the battery for vehicle to grid services and finds that there are a large number of trips in the afternoon period, typically when electrical demand is at a peak. Vehicle charging activity also tended towards daytime activity, contrary to the oft-assumed off-peak charging pattern.     

Forecasting electricity demand of electric vehicles by analyzing consumers’ charging patterns

The spread of electric vehicles (EVs) and their increasing demand for electricity has placed a greater burden on electricity generation and the power grid. In particular, the problem of whether to expand the electricity power stations and distribution facilities due to the construction of EV charging stations is emerging as an immediate issue. To effectively meet the demand for additional electricity while ensuring the stability of the power grid, there is a need to accurately predict the charging demands for EVs. Therefore, this study estimates the changes in electricity charging demand based on consumer preferences for EVs, charging time of day, and types of electric vehicle supply equipment (EVSE) and elucidates the matters to be considered for constructing EV infrastructure. The results show that consumers mainly preferred charging during the evening. However, when we considered different types of EVSEs (public and private) in the analysis, people preferred to charge at public EVSEs during the day. During peak load time, people tended to prefer charging using fast public EVSEs, which shows that consumers considered the tradeoffs between the full charge time and the price for charging. Based on these findings, this study provides key political implications for policy makers to consider in taking preemptive measures to adjust the electricity supply infrastructure.