Willingness-to-pay for alternative fuel vehicle characteristics: A stated choice study for Germany

In the light of European energy efficiency and clean air regulations, as well as an ambitious electric mobility goal of the German government, we examine consumer preferences for alternative fuel vehicles (AFVs) based on a Germany-wide discrete choice experiment among 711 potential car buyers. We estimate consumers’ willingness-to-pay and compensating variation (CV) for improvements in vehicle attributes, also taking taste differences in the population into account by applying a latent class model with 6 distinct consumer segments. Our results indicate that about 1/3 of the consumers are oriented towards at least one AFV option, with almost half of them being AFV-affine, showing a high probability of choosing AFVs despite their current shortcomings. Our results suggest that German car buyers’ willingness-to-pay for improvements of the various vehicle attributes varies considerably across consumer groups and that the vehicle features have to meet some minimum requirements for considering AFVs. The CV values show that decision-makers in the administration and industry should focus on the most promising consumer group of ‘AFV aficionados’ and their needs. It also shows that some vehicle attribute improvements could increase the demand for AFVs cost-effectively, and that consumers would accept surcharges for some vehicle attributes at a level which could enable their private provision and economic operation (e.g. fast-charging infrastructure). Improvement of other attributes will need governmental subsidies to compensate for insufficient consumer valuation (e.g. battery capacity).     

The role of alternative fuel vehicles: Using behavioral and sensor data to model hierarchies in travel

Greater adoption and use of alternative fuel vehicles (AFVs) can be environmentally beneficial and reduce dependence on gasoline. The use of AFVs vis-à-vis conventional gasoline vehicles is not well understood, especially when it comes to travel choices and short-term driving decisions. Using data that contains a sufficiently large number of early AFV adopters (who have overcome obstacles to adoption), this study explores differences in use of AFVs and conventional gasoline vehicles (and hybrid vehicles). The study analyzes large-scale behavioral data integrated with sensor data from global positioning system devices, representing advances in large-scale data analytics. Specifically, it makes sense of data containing 54,043,889 s of speed observations, and 65,652 trips made by 2908 drivers in 5 regions of California. The study answers important research questions about AFV use patterns (e.g., trip frequency and daily vehicle miles traveled) and driving practices. Driving volatility, as one measure of driving practice, is used as a key metric in this study to capture acceleration, and vehicular jerk decisions that exceed certain thresholds during a trip. The results show that AFVs cannot be viewed as monolithic; there are important differences within AFV use, i.e., between plug-in hybrids, battery electric, or compressed natural gas vehicles. Multi-level models are particularly appropriate for analysis, given that the data are nested, i.e., multiple trips are made by different drivers who reside in various regions. Using such models, the study also found that driving volatility varies significantly between trips, driver groups, and regions in California. Some alternative fuel vehicles are associated with calmer driving compared with conventional vehicles. The implications of the results for safety, informed consumer choices and large-scale data analytics are discussed.     

Customizing driving cycles to support vehicle purchase and use decisions: Fuel economy estimation for alternative fuel vehicle users

Wider deployment of alternative fuel vehicles (AFVs) can help with increasing energy security and transitioning to clean vehicles. Ideally, adopters of AFVs are able to maintain the same level of mobility as users of conventional vehicles while reducing energy use and emissions. Greater knowledge of AFV benefits can support consumers’ vehicle purchase and use choices. The Environmental Protection Agency’s fuel economy ratings are a key source of potential benefits of using AFVs. However, the ratings are based on pre-designed and fixed driving cycles applied in laboratory conditions, neglecting the attributes of drivers and vehicle types. While the EPA ratings using pre-designed and fixed driving cycles may be unbiased they are not necessarily precise, owning to large variations in real-life driving. Thus, to better predict fuel economy for individual consumers targeting specific types of vehicles, it is important to find driving cycles that can better represent consumers’ real-world driving practices instead of using pre-designed standard driving cycles. This paper presents a methodology for customizing driving cycles to provide convincing fuel economy predictions that are based on drivers’ characteristics and contemporary real-world driving, along with validation efforts. The methodology takes into account current micro-driving practices in terms of maintaining speed, acceleration, braking, idling, etc., on trips. Specifically, using a large-scale driving data collected by in-vehicle Global Positioning System as part of a travel survey, a micro-trips (building block) library for California drivers is created using 54 million seconds of vehicle trajectories on more than 60,000 trips, made by 3000 drivers. To generate customized driving cycles, a new tool, known as Case Based System for Driving Cycle Design, is developed. These customized cycles can predict fuel economy more precisely for conventional vehicles vis-à-vis AFVs. This is based on a consumer’s similarity in terms of their own and geographical characteristics, with a sample of micro-trips from the case library. The AFV driving cycles, created from real-world driving data, show significant differences from conventional driving cycles currently in use. This further highlights the need to enhance current fuel economy estimations by using customized driving cycles, helping consumers make more informed vehicle purchase and use decisions.     

Consumer valuation of changes in driving range: A meta-analysis

We perform a meta-analysis of studies investigating consumer preferences for electric and other alternative fuel vehicles (AFVs) to provide insights into the way driving range is traded off for capital costs. We find that consumers are willing to pay, on average, between 66 and 75 US$ for a 1-mile increase in driving range. Ceteris paribus, 100-mile-range cars have to be priced about 60% less than their conventional counterparts to become competitive. In line with intuition, but in contrast to most specifications employed in primary studies, we find that consumers’ marginal willingness to pay (WTP) decreases at a diminishing rate with increases in driving range. The variation in the WTP and compensating variation estimates among examined studies can be attributed to differences in the levels of driving range considered, in other elements of the study design and in the country of study. Our findings support stated preference literature’s conclusion that short driving range has been a major limitation to the large-scale adoption of battery electric vehicles (BEVs) and other AFVs, and that technological developments permitting longer driving ranges will, to some extent, facilitate their market penetration. We further propose that consumer valuation of driving range should not be examined in isolation from other attributes related to refuelling activities, such as refuelling duration and the coverage of refuelling infrastructure.     

Innovative alternatives take action – Investigating determinants of alternative fuel vehicle adoption

Alternative fuel vehicles (AFVs) as environmentally friendly alternatives to conventional internal combustion engines have gained increasing attention in general public. While empirical studies have begun to explore product-specific factors that drive consumer adoption of AFVs, an integrative framework of a comprehensive set of AFV adoption factors and its theoretical foundation as well as empirical validation is still missing. By drawing on theory of innovation adoption and theory of reasoned action we show that consumers’ perceptions of AFV attributes lead to a general attitude formation towards AFV. In conjunction with consumers’ subjective and personal norm, this in turn determines AFV adoption behavior. Concerning AFV attributes, compatibility, design, and relative advantage of AFVs exhibit the strongest influence on consumers’ attitude formation toward AFV. We derive implications for future research and policy makers. The latter include suggestions on how to develop and communicate AFV in order to stimulate AFV adoption.     

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.     

What is the market potential of plug-in electric vehicles as commercial passenger cars? A case study from Germany

Commercial passenger cars are a possible early market segment for plug-in electric vehicles (PEVs). Compared to privately owned vehicles, the commercial vehicle segment is characterized by higher mileage and a higher share of vehicle sales in Germany. To this point, there are only few studies which analyze the commercial passenger car sector and arrive at contradictory results due to insufficient driving profile data with an observation period of only one day. Here, we calculate the market potential of PEVs for the German commercial passenger car sector by determining the technical and economical potential for PEVs in 2020 from multi-day driving profiles. We find that commercial vehicles are better suited for PEVs than private ones since they show higher average annual mileage and drive more regularly. About 87% of the analyzed three-week vehicle profiles can technically be fulfilled by battery electric vehicles (BEVs) with an electric driving range of about 110 km while plug-in hybrid electric vehicles (PHEVs) with an electric range of 40 km could obtain an electric driving share of 60% on average. In moderate energy price scenarios, PEVs can reach a market share of 2–4% in the German commercial passenger car sales by 2020 and especially the large commercial branches (Trade, Manufacturing, Administrative services and Other services) are important. However, our analysis shows a high sensitivity of results to energy and battery prices as well as electric consumptions.     

Adoption of alternative fuel vehicles: Influence from neighbors,family and coworkers

During the last years, many governments have set targets for increasing the share of biofuels in the transportation sector. Understanding consumer behavior is essential in designing policies that efficiently increase the uptake of cleaner technologies. In this paper we analyze adopters and non-adopters of alternative fuel vehicles (AFVs). We use diffusion of innovation theory and the established notion that the social system and interpersonal influence play important roles in adoption. Based on a nationwide database of car owners we analyze interpersonal influence on adoption from three social domains: neighbors, family and coworkers. The results point primarily at a neighbor effect in that AFV adoption is more likely if neighbors also have adopted. The results also point at significant effects of interpersonal influence from coworkers and family members but these effects weaken or disappear when income, education level, marriage, age, gender and green party votes are controlled for. The results extend the diffusion of innovation and AFV literature with empirical support for interpersonal influence based on objective data where response bias is not a factor. Implications for further research, environmental and transport policy, and practitioners are discussed.     

Life cycle model of alternative fuel vehicles: emissions,energy, and cost trade-offs

This paper describes a life cycle model for performing level-playing field comparisons of the emissions, costs, and energy efficiency trade-offs of alternative fuel vehicles (AFV) through the fuel production chain and over a vehicle lifetime. The model is an improvement over previous models because it includes the full life cycle of the fuels and vehicles, free of the distorting effects of taxes or differential incentives. This spreadsheet model permits rapid analyses of scenarios in plots of trade-off curves or efficiency frontiers, for a wide range of alternatives with current and future prices and levels of technology. The model is available on request.The analyses indicate that reformulated gasoline (RFG) currently has the best overall performance for its low cost, and should be the priority alternative fuel for polluted regions. Liquid fuels based on natural gas, M100 or M85, may be the next option by providing good overall performance at low cost and easy compatibility with mainstream fuel distribution systems. Longer term, electric drive vehicles using liquid hydrocarbons in fuel cells may offer large emissions and energy savings at a competitive cost. Natural gas and battery electric vehicles may prove economically feasible at reducing emissions and petroleum consumption in niches determined by the unique characteristics of those systems.     

Individual characteristics and stated preferences for alternative energy sources and propulsion technologies in vehicles: A discrete choice analysis for Germany

With respect to the German goal of a transition to a lead market for electromobility within a short time period, this paper empirically examines the preferences for alternative energy sources or propulsion technologies in vehicles and particularly for electric vehicles. The data stem from a stated preference discrete choice experiment with 598 potential German car buyers. In order to simulate a realistic future purchase situation, seven vehicle types were incorporated in each of the six choice sets, i.e. hybrid, gas, biofuel, hydrogen, and electric vehicles besides common gasoline and diesel vehicles. The econometric analysis with flexible multinomial probit models reveals that potential car buyers in Germany currently have a low stated preference for electric, hydrogen, and hybrid vehicles. While our paper also discusses the impact of common vehicle attributes such as purchase price or service station availability, it particularly considers the effect of socio-demographic and environmental awareness variables. The estimation results reveal that younger potential car buyers have a higher stated preference for hydrogen and electric vehicles, males have a higher stated choice of hydrogen vehicles, and environmentally aware potential car buyers have a higher stated preference for hydrogen and electric vehicles. These results suggest that common policy instruments such as the promotion of research and development, taxation, or subsidization in the field of electromobility could be supplemented by strategies to increase the social acceptance of alternative vehicle types that are directly oriented to these population groups. Methodologically, our study highlights the importance of the inclusion of taste persistence across the choice sets and a high number of random draws in the Geweke–Hajivassiliou–Keane simulator in the simulated maximum likelihood estimation of the multinomial probit models.     

Introducing alternative fuel vehicles in Hong Kong: views from the public light bus industry

Hong Kong was the first place in the world to implement a trial scheme to convert all public light buses (PLBs) on the road from diesel to alternative fuel vehicles (AFVs). The scheme, however, did not receive much support from PLB operators. At present, there is a rich literature on households’ demand for AFVs (especially in the USA). However, there have not been many studies about the demand for commercial AFVs in the business and public transport sectors. Since light buses running on alternative fuels are not widely available in the Hong Kong market, a stated preference (SP) survey was conducted to solicit the preferences of PLB operators on eight commercial vehicle attributes and seven forms of government support. The SP data are analyzed by multinomial logit (MNL) models. Detailed analyses on market segmentation and price elasticities follow. The results are of theoretical and practical significance.     

Consumer preferences for electric vehicles: a literature review

Widespread adoption of electric vehicles (EVs) may contribute to the alleviation of problems such as environmental pollution, global warming and oil dependency. However, the current market penetration of EV is relatively low in spite of many governments implementing strong promotion policies. This paper presents a comprehensive review of studies on consumer preferences for EV, aiming to better inform policy-makers and give direction to further research. First, we compare the economic and psychological approach towards this topic, followed by a conceptual framework of EV preferences which is then implemented to organise our review. We also briefly review the modelling techniques applied in the selected studies. Estimates of consumer preferences for financial, technical, infrastructure and policy attributes are then reviewed. A categorisation of influential factors for consumer preferences into groups such as socio-economic variables, psychological factors, mobility condition, social influence, etc. is then made and their effects are elaborated. Finally, we discuss a research agenda to improve EV consumer preference studies and give recommendations for further research.

Abbreviations: AFV: alternative fuel vehicle; BEV: battery electric vehicle; CVs: conventional vehicles; EVs: electric vehicles; FCV: fuel cell vehicle; HCM: hybrid choice model; HEV: hybrid electric vehicle (non plug-in); HOV: high occupancy vehicle; MNL: MultiNomial logit; MXL: MiXed logit model; PHEV: plug-in hybrid electric vehicle; RP: revealed preference; SP: stated preference.     

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.     

Preferences for alternative fuel vehicles by Dutch local governments

Using a choice model, we estimate the preferences for alternative fuel vehicles by Dutch local governments. The analysis shows that local governments are willing to pay between 25% and 50% extra for an alternative fuel vehicle without a serious loss of utility. Further, local emissions are an important criterion on which to base a decision, especially for municipalities and provinces. We also calculate the utility for a number of prominent alternative fuel vehicles. We find that show that local governments value the battery electric vehicle and biogas internal combustion engine equally. It is important, however, that the time to refuel for electric vehicles is reduced to about 30 min.     

Positive and negative spillover effects from electric car purchase to car use

This study reports the results of two online surveys conducted on buyers of conventional combustion engine cars compared to those of electric vehicles in Norway. The results show that electric cars are generally purchased as additional cars, do not contribute to a decrease in annual mileage if the old car is not substituted, and that electric car buyers use the car more often for their everyday mobility. Psychological determinants derived from the theory of planned behavior and the norm-activation theory show a high correlation between the purchase and use stages. Electric car buyers, have lower scores on many determinants of car use, especially awareness of consequences and close determinants of car use.     

Locating refuelling stations for alternative fuel vehicles: a review on models and applications

The recent concerns on environmental issues have expedited the technological development of alternative fuel vehicles (AFVs), but the deployment of AFVs still remains at the initial stage mainly because of the lack of refuelling facilities. Recognising this, researchers have conducted various studies, proposing a variety of approaches to strategically locating refuelling stations. This paper presents a comprehensive review of the approaches, focusing more on applications than computational issues. The review identifies two main elements of the approaches: location modelling and refuelling demand estimation. Examining how the elements were handled in refuelling location studies, this paper suggests that future refuelling location models should properly reflect the intricate and various perspectives of three major AFV stakeholders: drivers, government agencies and refuelling service providers. This study is expected to help researchers efficiently set up their refuelling location problems and identify critical factors for seeking the solutions.     

Electrification of the two-car household: PHEV or BEV?

In previous works, we have shown two-car households to be better suited than one-car households for leveraging the potential benefits of the battery electric vehicle (BEV), both when the BEV simply replaces the second car and when it is used optimally in combination with a conventional car to overcome the BEV’s range limitation and increase its utilization. Based on a set of GPS-measured car movement data from 64 two-car households in Sweden, we here assess the potential electric driving of a plug-in hybrid electric vehicle (PHEV) in a two-car household and compare the resulting economic viability and potential fuel substitution to that of a BEV.Using estimates of near-term mass production costs, our results suggest that, for Swedish two-car households, the PHEV in general should have a higher total cost of ownership than the BEV, provided the use of the BEV is optimized. However, the PHEV will increasingly be favored if, for example, drivers cannot or do not want to optimize usage. In addition, the PHEV and the BEV are not perfect substitutes. The PHEV may be favored if drivers require that the vehicle be able to satisfy all driving needs (i.e., if drivers don’t accept the range and charge-time restrictions of the BEV) or if drivers requires an even larger battery in the BEV to counter range anxiety.We find that, given a particular usage strategy, the electric drive fraction (EDF) of the vehicle fleet is less dependent on whether PHEVs or BEVs are used to replace one of the conventional cars in two-car households. Instead, the EDF depends more on the usage strategy, i.e., on whether the PHEV/BEV is used to replace the conventional car with the higher annual mileage (“the first car”), the less used car (“the second car”), or is used flexibly to substitute for either in order to optimize use. For example, from a fuel replacement perspective it is often better to replace the first car with a PHEV than to replace the second with a BEV.     

Incentivizing alternative fuel vehicles: the influence of transport policies,attitudes and perceptions

This paper aims to evaluate the influence of policies, attitudes and perceptions when incentivizing alternative fuel vehicles. The impact of possible policies such as gasoline taxes increases, purchase price subsidies, tax exemptions, and increases in fuel recharging station availability for alternative fuelled vehicles is evaluated using hybrid choice models. The models also allow assessing the sensitivity of latent variables (i.e., attitudes and perceptions) in the car purchase behaviour. The models are estimated using data from a stated choice survey collected in five Colombian cities. The latent variables are obtained from the rating of statements related to the transport system, environmental concern, vehicle preferences, and technology. The modelling approach includes regression between latent variables. Results show that environmental concern and the support for green transport policies have a positive influence on the intention to purchase alternative fuel vehicles. Meanwhile, people who reveal to be car-dependent prefer to buy standard fuelled vehicles. The analysis among cities shows similar trends in individual behaviour, although there are differences in attribute sensitivities. The policy scenario analysis revealed high sensitivity to capital cost and the need for extensive investments in refuelling stations for alternative fuel vehicles to become attractive. Nevertheless, all policies should not only be directed at infrastructure and vehicles but also be focused on user awareness and acceptance of the alternative fuel vehicles. The analysis suggests that in an environmentally conscious market, people prefer alternative fuels. However, if the transport policies support private transport, the market shares of alternative fuel vehicles will decrease.     

Fuel savings on a heavy vehicle via aerodynamic drag reduction

In this numerical study, the fuel-saving potentials of drag-reducing devices retrofitted on heavy vehicles are analysed. Realistic on-road operations are taken into account by simulating typical driving routes on long-haul and urban distributions; variations in vehicle weight are also considered. Results show that the performance of these aerodynamic devices depend both on their functions and how the vehicles are operated. Vehicles on long-haul routes generally save twice as much fuel as those driven in urban areas. The fuel reductions from using selected devices individually on a large truck range from less than 1% to almost 9% of the fuel cost of a vehicle doing an annual mileage is 80,000 miles.     

Fuel cycle emissions and life cycle costs of alternative fuel vehicle policy options for the City of Houston municipal fleet

Municipal fleet vehicle purchase decisions provide a direct opportunity for cities to reduce emissions of greenhouse gases (GHG) and air pollutants. However, cities typically lack comprehensive data on total life cycle impacts of various conventional and alternative fueled vehicles (AFV) considered for fleet purchase. The City of Houston, Texas, has been a leader in incorporating hybrid electric (HEV), plug-in hybrid electric (PHEV), and battery electric (BEV) vehicles into its fleet, but has yet to adopt any natural gas-powered light-duty vehicles. The City is considering additional AFV purchases but lacks systematic analysis of emissions and costs. Using City of Houston data, we calculate total fuel cycle GHG and air pollutant emissions of additional conventional gasoline vehicles, HEVs, PHEVs, BEVs, and compressed natural gas (CNG) vehicles to the City's fleet. Analyses are conducted with the Greenhouse Gases, Regulated Emissions, and Energy use in Transportation (GREET) model. Levelized cost per kilometer is calculated for each vehicle option, incorporating initial purchase price minus residual value, plus fuel and maintenance costs. Results show that HEVs can achieve 36% lower GHG emissions with a levelized cost nearly equal to a conventional sedan. BEVs and PHEVs provide further emissions reductions, but at levelized costs 32% and 50% higher than HEVs, respectively. CNG sedans and trucks provide 11% emissions reductions, but at 25% and 63% higher levelized costs, respectively. While the results presented here are specific to conditions and vehicle options currently faced by one city, the methods deployed here are broadly applicable to informing fleet purchase decisions.