Interaction of Consumer Heterogeneity and Technological Progress in the US Electric Vehicle Market

Abstract

Electric Technology Vehicles (ETVs: hybrid, electric, and plug-in hybrid) may reach price parity with incumbent internal combustion vehicles (ICEVs) in the near future. Climate policy for transportation will depend on the degree to which consumers prefer ETVs, and price parity is a key factor. In this study, we explore the interaction between future cost reductions and the economically motivated adoption of ETVs. We construct a model of the U.S. personal vehicle market accounting for heterogenous use and vehicle preferences, in which adoption induces cost reductions that increase future market share. Model results indicate that price parity is reached for most consumers in a number of cost scenarios, but not with constant ICEV costs and modest ETV cost declines. A price parity future suggests that government support could be temporary and phased out after a successful market transition. However, if ETVs continue to be more expensive than ICEVs, then lasting government support is needed. Heterogeneity is essential to understanding the market transition: treating consumers as heterogeneous results in an ETV market share 23% higher than assuming average consumers. Future work can clarify ETV support policy by resolving uncertainty in cost trajectories and modeling dynamic and heterogenous consumer markets.

An Optimization Model for Structuring a Car-Sharing Fleet Considering Traffic Congestion Intensity

“…However, in real scenarios, the network of charging stations might have a limited capacity for satisfying the uncertain demands for recharging the EVs. Tere are various research studies on fnding optimal locations for refueling stations under diferent scenarios and conditions [58][59][60][61][62][63][64]. Terefore, from the standpoint of an urban decision-maker, the integration of the frameworks developed in the aforementioned studies into the optimization framework of the current research study will be another interesting future line of research.…”

Marketing Strategy and Preference Analysis of Electric Cars in a Developing Country: A Perspective from the Philippines

“…The diverse age groups collected in this study indicate that all age groups are persuaded by the EV costs for their purchase decision. Furthermore, affordability is a crucial decision factor for consumers with limited budgets [55]. Another research work by Xia et al [56] echoed the sentiment that, while consumers seek affordability, they are also unwilling to compromise on the quality of the EVs.…”

Assessment of Selected Factors Influencing the Purchase of Electric Vehicles—A Case Study of the Republic of Croatia

“…However, one of the particularly significant factors, classified among the local factors that can influence the decision to purchase electric vehicles, are incentives, i.e., incentive policies defined by states, as well as the cost of owning a vehicle that may be determined by the costs imposed by the state. Most importantly, in the research carried out by [48], it was identified that one of the fundamental incentives for buying electric vehicles is the economic benefit, i.e., the savings that electric vehicle buyers can achieve due to the lower cost of owning electric vehicles.…”