Simulating early adoption of alternative fuel vehicles for sustainability

We quantify the conditions that might trigger wide spread adoption of alternative fuel vehicles (AFVs) to support energy policy. Empirical review shows that early adopters are heterogeneous motivated by financial benefits, environmental appeal, new technology, and vehicle reliability. A probabilistic Monte Carlo simulation model is used to assess consumer heterogeneity for early and mass market adopters. For early adopters full battery electric vehicles (BEVs) are competitive but unable to surpass diesels or hybrids due to purchase price premium and lack of charging availability. For mass adoption, simulations indicate that if the purchase price premium of a BEV closes to within 20% of an in-class internal combustion engine (ICE) vehicle, combined with a 60% increase in refuelling availability relative to the incumbent system, BEVs become competitive. But this depends on a mass market that values the fuel economy and CO2 reduction benefits associated with BEVs. We also find that the largest influence on early adoption is financial benefit rather than pro-environmental behaviour suggesting that AFVs should be marketed by appealing to economic benefits combined with pro-environmental behaviour to motivate adoption. Monte Carlo simulations combined with scenarios can give insight into diffusion dynamics for other energy demand-side technologies. © 2012 Elsevier Inc.

Innovation, the diesel engine and vehicle markets: Evidence from OECD engine patents

This paper uses a patent data set to identify factors fostering innovation of diesel engines between 1974 and 2010 in the OECD region. The propensity of engine producers to innovate grew by 1.9 standard deviations after the expansion of the car market, by 0.7 standard deviations following a shift in the EU fuel economy standard, and by 0.23 standard deviations. The propensity to develop emissions control techniques was positively influenced by pollution control laws introduced in Japan, in the US, and in the EU, but not with the expansion of the car market. Furthermore, a decline in loan rates stimulated the propensity to develop emissions control techniques, which were simultaneously crowded out by increases in publicly-funded transport research and development. Innovation activities in engine efficiency are explained by market size, loan rates and by (Organisation for Economic Cooperation and Development) diesel prices, inclusive of taxes. Price effects on innovation, outweigh that of the US corporate average fuel economy standards. Innovation is also positively influenced by past transport research and development. © 2014 Elsevier Ltd.