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.     

Car fuel-type choice under travel demand management and economic incentives

Future levels of vehicle air pollution in urban areas will depend on the proportion of new car buyers who opt for less polluting vehicles, as these appear on the market. This paper examines the factors likely to influence the demand for lower emission and zero emission vehicles. Using a discrete choice experiment, suburban driver commuters choose between three types of vehicle, one conventional, one fuel-efficient and one electric. Each is characterized by varying vehicle cost and performance measures, range and refueling rates, and commuting costs and times. The latter are manipulated to determine how their use as economic instruments might influence vehicle choice. All cost and time variables are expressed as ratios of the respondent’s current situation. Parameters of a multinomial discrete choice model are used in a choice simulator to estimate the average choice probability of each type of vehicle under different scenarios reflecting possible future relative vehicle prices and performance levels as well as differential commuting costs and times based on policies aimed at encouraging the purchase of cleaner vehicles. The evidence is that the latter economic instruments will have modest effects on vehicle choice. By contrast there would be a large shift of demand to cleaner and zero-emission vehicles provided their cost and performance came within an acceptable range of conventional vehicles.     

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).     

Consumer valuation of new car attributes: An econometric analysis of the demand for domestic and Japanese/Western European imports

Although previous studies of new vehicle choice decisions have shown that consumers evaluate the attributes of domestic vehicles differently from those of imported vehicles, the assumption underlying these results is overly restrictive. In particular, there is no reason to assume, a priori, that the attributes of all imported vehicles have similar effects upon consumer choice behavior. A competing hypothesis, for example, is that consumers of U.S. and European automobiles have similar attribute valuations that are differentiated from those of Japanese consumers. In the present paper, a multinomial logit model of vehicle type choice is developed which more completely differentiates imports by country of origin. Using a 1985 national sample of new car buyers to estimate the model, willingness to pay measures were calculated and nested hypothesis tests on attribute valuation performed. The results supported the hypothesis that consumers value vehicle attributes differently depending upon its country of origin. Moreover, consumers do not have similar valuations on the attributes of all imports implying that an arbitrary distinction between domestic and imported vehicles may produce misleading results.     

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.     

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.     

Symbolism in California’s early market for hybrid electric vehicles

This study explores the symbolic meanings being created, appropriated, and communicated by the owners of hybrid electric vehicles. As symbolic meanings are shown to be important to hybrid electric vehicle purchase and use, understanding the meanings, as well as their construction and communication, is essential for policy makers and others hoping to promote these new types of vehicles. Hybrid electric vehicles embody combinations of meanings that were previously unavailable from automobiles. Market observers who fail to recognize this struggle to explain why some people buy hybrid electric vehicles. They may characterize buyers as naı¨ve about calculating payback on fuel economy, or dismiss owners as image-seeking environmentalists. This research belies such simplistic explanations. Through the telling and analysis of buyers’ own stories, this study takes a robust approach to understanding the creation and spread of new symbolic meanings in the automotive market. Data were collected in ethnographic interviews with hybrid electric vehicle owners in the California, and analyzed using methods based on semiotic theory. In particular, the study explores how widely recognized social meanings (denotations) are connected to more personal meanings (connotations) and the effect that both types of meanings have on vehicle purchase and use.     

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.     

Willingness-to-pay for infrastructure investments for alternative fuel vehicles

This study investigates potential demand for infrastructure investment for alternative fuel vehicles by applying stated preference methods to a Japanese sample. The potential demand is estimated on the basis of how much people are willing to pay for alternative fuel vehicles under various refueling scenarios. Using the estimated parameters, the economic efficiency of establishing battery-exchange stations for electric vehicles is examined. The results indicate that infrastructural development of battery-exchange stations can be efficient when electric vehicle sales exceed 5.63% of all new vehicle sales. Further, we find a complementary relationship between the cruising ranges of alternative fuel vehicles and the infrastructure established.     

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.     

Household demand and willingness to pay for clean vehicles

This paper examines the factors and incentives that are most likely to influence households’ choice for cleaner vehicles in the metropolitan area of Hamilton, Canada. Data collection is based on experimental design and stated choice methods through an Internet survey. Choice alternatives included a conventional gasoline, a hybrid and an alternative fuelled vehicle. Each option is described by a varying set of vehicle attributes and economic incentives, customized per respondent. Controlling for individual, household and dwelling-location characteristics, parameters of a nested logit model indicates that reduced monetary costs, purchase tax relieves and low emissions rates would encourage households to adopt a cleaner vehicle. On the other hand, incentives such as free parking and permission to drive on high occupancy vehicle lanes with one person in the car were not significant. Furthermore, limited fuel availability is a concern when households considered the adoption of an alternative fuelled vehicle. Finally, willingness-to-pay extra for a cleaner vehicle is computed based on the estimated parameters.     

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.     

An integrated model for discrete and continuous decisions with application to vehicle ownership,type and usage choices

This paper proposes an integrated econometric framework for discrete and continuous choice dimensions. The model system is applied to the problem of household vehicle ownership, type and usage. A multinomial probit is used to estimate household vehicle ownership, a multinomial logit is used to estimate the vehicle type (class and vintage) choices, and a regression is used to estimate the vehicle usage decisions. Correlation between the discrete (number of vehicles) and the continuous (total annual miles traveled) parts is captured with a full variance–covariance matrix of the unobserved factors. The model system is estimated using Simulated Log-Likelihood methods on data extracted from the 2009 US National Household Travel Survey and a secondary dataset on vehicle characteristics. Model estimates are applied to evaluate changes in vehicle holding and miles driven, in response to the evolution of social societies, living environment and transportation policies.     

Who will buy electric vehicles? Identifying early adopters in Germany

Electric vehicles (EVs) have noteworthy potential to reduce global and local emissions and are expected to become a relevant future market for vehicle sales. Both policy makers and car manufacturers have an interest to understand the first large EV user group, frequently referred to as ‘early adopters’. However, there are only a few empirical results available for this important group. In this paper, we analyse and discuss several empirical data sets from Germany, characterising this user group from both a user and a product perspective, i.e. who is willing to buy an EV and who should buy one. Our results show that the most likely group of private EV buyers in Germany are middle-aged men with technical professions living in rural or suburban multi-person households. They own a large share of vehicles in general, are more likely to profit from the economical benefits of these vehicles due to their annual vehicle kilometres travelled and the share of inner-city driving. They state a higher willingness to buy electric vehicles than other potential adopter groups and their higher socio-economic status allows them to purchase EVs. In contrast to this, inhabitants of major cities are less likely to buy EVs since they form a small group of car owners in general, their mileage is too low for EVs to pay off economically and they state lower interest and lower willingness to pay for EVs than other groups. Our results indicate that transport policy promoting EVs should focus on middle-aged men with families from rural and sub-urban cities as first private EV buyers.     

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.     

The role of charging and refuelling infrastructure in supporting zero-emission vehicle sales

Widespread uptake of battery electric, plug-in hybrid, and hydrogen fuel-cell vehicles (collectively zero-emissions vehicles or ZEVs) could help many regions achieve deep greenhouse gas mitigation goals. Using the case of Canada, this study investigates the extent to which increasing ZEV charging and refuelling availability may boost ZEV sales relative to other ZEV-supportive policies. We adapt a version of the Respondent-based Preferences and Constraints (REPAC) model using 2017 survey data from 1884 Canadian new vehicle-buyers to simulate the sales impacts of increasing electric vehicle charging access at home, work, public destinations, and on highways, as well as increasing hydrogen refuelling station access. REPAC is built from a stated preference choice model and represents constraints in supply and consumer awareness, as well as dynamics in ZEV policy out to 2030. Results suggest that new ZEV market share from 2020 to 2030 does not substantially benefit from increased infrastructure. Even when electric charging and hydrogen refuelling access are simulated to reach “universally” available levels by 2030, ZEV sales do not rise by more than 1.5 percentage points above the baseline trajectory. On the other hand, REPAC simulates ZEV market share rising as high as 30% by 2030 with strong ZEV-supportive policies, even without the addition of charging or refuelling infrastructure. These findings stem from low consumer valuation of infrastructure found in the stated preference model. Results suggest that achieving ambitious ZEV sale targets requires a comprehensive suite of policies beyond a focus on charging and refueling infrastructure.     

A utility maximizing model of the demand for multi-destination non-work travel

The multinomial probit model of travel demand is considerably more general but much less tractable than the better-known multinomial logit model. In an effort to determine the effects of using the relatively simple logit model in situations where the assumptions of probit modeling are satisfied but those of logit modeling are not, the accuracy of the multinomial logit model as an approximation to a variety of three-alternative probit models has been evaluated. Multinomial logit can give highly erroneous estimates of the choice probabilities of multinomial probit models. However, logit models appear to give asymptotically accurate estimates of the ratios of the coefficients of the systematic components of probit utility functions, even when the logit choice probabilities differ greatly from the probit ones. Large estimation data sets are not necessarily needed to enable likelihood ratio tests to distinguish three-alternative probit models from logit models that give seriously erroneous estimates of the probit choice probabilities. Inclusion of alternative-specific dummy variables in logit utility functions cannot be relied upon to reduce significantly the errors of logit approximations to the choice probabilities of probit models whose utility functions do not contain the dummies.     

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.     

From e-bike to car: A study on factors influencing motorization of e-bike users across China

Household car ownership has risen dramatically in China over the past decade. At the same time a disruptive transportation technology emerged, the electric bike (e-bike). Most studies investigating motorization in China focus on macro-level economic indicators like GDP, with few focusing on household, city-level, environmental, or geographic indicators, and none in the context of high e-bike ownership. This study examines household vehicle purchase decisions across 59 cities in China with broad geographic, environmental, and socio-economic characteristics. We focus on a subset of households who own e-bikes and rely on a telephone survey from an industry customer database. From these responses, we estimate two three-level hierarchical choice models to assess attributes that contribute to (1) recent car purchases and (2) the intention to buy a car in the near future. The results show that the models are dominated by household characteristics including household income, household size, household vehicle ownership, number of licensed drivers and duration of car ownership. Some geographic, environmental and socio-economic factors have significant influences on car purchase decisions. Only two city-level transportation variable have an effect – higher taxi density and higher bus density reducing car purchase. Cold weather, population density gross domestic product per capita positively influence car purchase, while urbanization rate reduces car purchase. Because of supply heterogeneity in the data set, described by publicly available urban transportation data, this is the first study that can include geographic and urban infrastructure differences that influence purchase choice and suggests potential region-specific policy approaches to managing car purchase may be necessary.     

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.