Spatial and unobserved heterogeneity in consumer preferences for adoption of electric and hybrid vehicles: A Bayesian hierarchical modeling approach

Abstract

The transition to low carbon vehicles known as alternative fuel vehicles (AFVs) is well underway. This transition has been motivated partly by consumer demand and partly by legislation such as the Zero Emission Vehicle mandate, which requires manufacturers to sell a certain percentage of their vehicles as AFVs. While the long-term adoption of AFVs (specifically, electric and hybrids) may take several years, there is a need to understand consumer preferences for AFV adoption and the pathways of AFV adoption from a national perspective. Therefore, this study sought to provide information about consumer preferences regarding AFV ownership while considering spatial and unobserved heterogeneity in consumer preferences, which can potentially impact societal transition to low carbon fueled vehicles. The 2017 National Household Travel Survey was used to calibrate Bayesian logit and hierarchical models. The findings of these models reveal that higher gasoline prices contribute toward the adoption of battery electric vehicles. The results also reveal that the perceived disadvantages of AFVs for long commutes are the key barrier in wider adoption of AFVs. Interestingly, frequent use of the internet by consumers revealed a higher likelihood for purchase of hybrid vehicles. Furthermore, West Coast residents are observed to be a large portion of the early adopters and are more likely to purchase hybrids as compared to battery electric vehicles. The knowledge generated by this study has implications for making better informed decisions about AFV adoption and developing incentives to promote wider adoption of AFVs by overcoming their perceived disadvantages.