will subsidies drive electric vehicle adoption? measuring ...phev10 vs. hev (toyota prius) subsidy...

Carnegie Mellon

Will Subsidies Drive Electric Vehicle Adoption? Measuring Consumer Preferences in the U.S. and China

John Paul Helveston1, Yimin Liu4, Elea McDonnel Feit3, Erica Fuchs1, Erica Klampfl4, Jeremy Michalek1,2

Department of Engineering and Public Policy

August 05, 2014 1.  Department of Engineering & Public Policy, CMU 2.  Department of Mechanical Engineering, CMU 3.  Department of MarkeFng, The Wharton School, University of Pennsylvania 4.  Ford Motor Company

(In review at Transportation Research Part A: Policy and Practice)

John Helveston Carnegie Mellon

China: Oil & Economic Security, Less Pollution, Tech. Leadership

§  China largest car market in the world today: o  16.3 million new cars sold in 2013 o  1/4 new cars in the world are made in China

§  Govt promoting policies to support energy-saving technologies (Zhou et al., 2010)

§  Home to distinct form industrial innovation: often in technology commercialization, redefinition (Brandt & Thun, 2010; Breznitz & Murphee, 2011; Ernst & Naughton, 2008)

§  Debated: despite less stringent requirements (WTO,

1979), can rapidly industrializing nations reduce pollution, industrialize, & lead innovation? (Wheeler, 2001)

§  Opportunity: Electric vehicles

August 05, 2014 2 Subsidies & Consumer Preferences for EVs in China / U.S.

John Helveston Carnegie Mellon 3

EVs: Shift gas to electricity, reduce oil consumption & emissions

Conven&onal Hybrid-‐Electric Plug-‐in Hybrid Electric

Ba8ery Electric

AbbreviaFon CV HEV PHEV BEV

Power Convertor Engine Engine & Motor

Engine & Motor Motor

BaRery Pack -‐-‐ Small Medium Large

Gasoline -‐-‐

Electricity -‐-‐ -‐-‐

ConventionalHybrid-Electric

ü üGasoline

Electricity

Power Convertor Engine MotorEngine &

MotorBattery

Pack- Small Large

ü

Battery Electric

ü

ü

Engine & Motor

Medium

Plug-in Hybrid Electric

CV HEV PHEV BEV


ü üGasoline

Electricity


MotorBattery

Pack- Small Large

ü

Battery Electric

ü

ü

Engine & Motor

Medium


CV HEV PHEV BEV


ü üGasoline

Electricity


MotorBattery

Pack- Small Large

ü

Battery Electric

ü

ü

Engine & Motor

Medium


CV HEV PHEV BEV

August 05, 2014 Subsidies & Consumer Preferences for EVs in China / U.S.

Full Gasoline Full Gasoline Mix No Gasoline


EVs are central in tension between national oil security and environmental damage


Oil Consump&on Emissions

Problem Impact Problem Impact

U.S. Imports 40% from OPEC countries (US EIA 2012) -‐ PHEVs expected to

use about 40 -‐ 60% less petroleum than CVs (ANL 2010) -‐ BEVs use no oil!

20% of GHG, 40% of VOC, 77% of CO, 49% of NOx (US EIA 2012)

Depending on grid mix, PHEVs have potenFal to reduce GHG by 32%

China

Imports 66% from Middle East, West Africa, former Soviet Union (Ma et al., 2012)

Similar, even worse for NOx & CO (Lang et al., 2013)

Large regional variaFon: GHGs may be reduced, but PM2.5 may increase

1985 1990 1995 2000 2005 20100

5

10

15

20

25

Year

Milli

on B

arre

ls p

er D

ay

United States

China

Imports

Imports

ConsumptionProduction

Life cycle electricity GHG intensity (g CO2−eq/kWh)0 200 400 600 800 1000

0

50

100

150

200

250

300

Life

cyc

le G

HG

s (g

CO

2−eq

/km

)

BEV

CV

HEV

PHEV30

PHEV60

● ● ● ●Natural gasNatural gasNatural gasNatural gasNatural gasNatural gasNatural gasNatural gasNatural gas CoalCoalCoalCoalCoalCoalCoalCoalCoalLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbon

U.S. AverageChina Average


Research Questions

§  How do existing preferences shape adoption of electrified vehicles in U.S. & China? o  Under what conditions would mainstream adoption

of EVs occur? o  What are the implications of existing preferences

for national policy and global technology trajectories?



Measuring Consumer Preferences

August 05, 2014 6

§  How do you get data on vehicles that don’t exist yet? §  Our Approach: Choice-Based Conjoint Surveys

Subsidies & Consumer Preferences for EVs in China / U.S.


“Stated Preference” (SP) data from hypothetical survey choices



●

●

●

●

Beijing

Shanghai

Shenzhen

Chengdu

8

China Fielding: Jul. 16 – Aug. 16, 2012

§  On the ground §  Partnered with State Information Center to

field on the ground in China §  Targeted 4 major cities: Beijing, Shanghai,

Shenzhen, & Chengdu •  Tier 1 cities •  Largest car markets •  Not rural •  Gov’t focus for EVs •  Geographically diverse •  35% of 2010 total sales

448 Respondents 15 Choice QuesFons Each 6,720 Choice QuesFons


John Helveston Carnegie Mellon 9 August 05, 2014

§  Online car buyers identified through short screener survey, compensated $2.00.

§  Auto show car buyers taken at random, compensated with iPod raffle.

U.S. Fielding: Sept. 2012 & Feb. 2013 283 Online Respondents 101 Auto Show Respondents 15 Choice QuesFons Each 5,760 Choice QuesFons

U.S. Sample: 384 Car Respondents

UrbanSuburban Rural

34.7%29.6%35.7%

U.S. Sample: 101 Auto Show Car Respondents

UrbanSuburban Rural

26.3%41.1%32.6%

Auto Show Sample

Full Sample

& Pi8sburgh Auto Show



Weights added to match car-buying demographic

August 05, 2014 10

Sample demographics compared to large new car buyer survey by Maritz (supplied by Ford)

U.S.

Our Sample Weighted Sample

Maritz Sample

57.3 (29.3) 74.3 (28.7) 74.8 (27.3)

33.9 (12.7) 51 (14.8) 53.1 (15.4) 0.6 (1.1) 1.4 (1.4) 0.4 (0.8) 1.8 (0.8) 2 (0.7) -‐-‐ 22.9 (10.4) 23.3 (11.4) -‐-‐

11,200 (4,800) 12,500 (4,600) 11,400 (6,400)

2.7 (1.3) 2.7 (1.2) 2.5 (1.2)

7.2 (1.9) 7.9 (2.3) 7.2 (2.3) 35.3% 32.6% 39.3%

44.6% 68.9% 73.5%

72.1% 40.3% 75.0%

52.3% 71.2% 53.7%

4.4% 1.3% -‐-‐ 384 384 161,903

Variable

Household Income

Age

Num Children

Num Vehicles Daily VMT

Annual VMT

Household Size

Years EducaFon

Percent Female

Percent Married

Percent with No Children

Percent College Graduates Percent First Time Buyers

n

China

Our Sample Weighted Sample

Maritz Sample

24.1 (15.7) 26.1 (18) 26.1 (17.6)

33.3 (10.6) 34.8 (7.8) 35.1 (7.8) 0.6 (0.6) 0.7 (0.6) 0.7 (0.6) 0.4 (0.6) 0.5 (0.7) -‐-‐

-‐-‐ -‐-‐ -‐-‐ -‐-‐ -‐-‐ 10,600 (6,000)

3.3 (1.1) 3.3 (1.2) 3.2 (1)

5.9 (1.9) 6 (1.8) 5.9 (2) 39.4% 41.1% 28.7%

55.1% 70.2% 85.6%

52.2% 36.5% 36.4%

30.6% 33.1% 34.4%

65.4% 59.2% -‐-‐ 448 448 13,469



Quantifying Attribute Tradeoffs with Discrete Choice Models

August 05, 2014 11 Subsidies & Consumer Preferences for EVs in China / U.S.


Use random utility model to describe choice behavior

August 05, 2014

=UnjU&lity to person n from choosing alterna&ve j

Goal of inference: Understand how observable product a8ributes influence consumer choices

Es&mated weigh&ng coefficient

Observed a8ributes

= ′β Xnj

independently, idenFcally distributed extreme value

εnjExample:

Xnj εnj Price Color

Brand Custom rims

Fuel Economy Number of cup holders

Unobservables

+εnj j = 1,..., J



HEV

PHEV10

PHEV20

PHEV40

BEV75

BEV100

BEV150

15 10 5 0 5 10

WTP ($1,000)

Baseline: CVVehicle Technology

China

U.S.

U.S. more opposed to BEVs than China

13 August 05, 2014

Vehicle Technologies Increasin

g baRery siz

e

•  Most Chinese are first-‐Fme car buyers. •  Chinese more familiar with plug-‐in vehicles (200 – 300 million e-‐bikes currently on the ground).

U.S. consumers sensiFve to limited electric range (Axsen & Kurani, 2012).

Mean Willingness-‐to-‐Pay ($1,000)

Increasin

g electric ra

nge


WTP = βattβ price


Brand, Fuel Economy, & Acceleration Important

14 August 05, 2014

Brand

Performance

Willingness-to-pay ($1,000)


20 10 0 10

HEVPHEV10PHEV20PHEV40

BEV75BEV100BEV150


Baseline: GermanBrand

20 10 0 10

AmericanJapanese

ChineseSKorean


Performance

-5 0 10

PHEV Fast Charge AbilityBEV Fast Charge Ability

Reduce Op. Cost by 5 cents / mileReduce 0-60 mph Accel. Time by 4 sec.

ChinaU.S.



20 10 0 10

HEVPHEV10PHEV20PHEV40

BEV75BEV100BEV150


Baseline: GermanBrand

20 10 0 10

AmericanJapanese

ChineseSKorean


Performance

-5 0 10

PHEV Fast Charge AbilityBEV Fast Charge Ability

Reduce Op. Cost by 5 cents / mileReduce 0-60 mph Accel. Time by 4 sec.

ChinaU.S.


WTP = βattβ price


Subsidies play an important role in plug-in vehicle attractiveness

15 August 05, 2014

0 5 10 15 200

20406080

100 PHEV10 vs. HEV (Toyota Prius)

Subsidy ($1,000 USD)

Plug−i

n ve

hicl

e sh

are

(%)

●

Current SubsidiesU.S.China

●

0 5 10 15 200

20406080

100 PHEV20 vs. HEV (Ford C−Max)


Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080

100 PHEV40 vs. CV (BYD F3)


Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080

100 PHEV40 vs. CV (Volt vs. Cruze)


Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080

100 BEV75 vs. CV (Leaf vs. Versa)


Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080

100 BEV100 vs. CV (Ford Focus)


Plug−i

n ve

hicl

e sh

are

(%)

●Current Subsidies

U.S.China

●

PHEV-‐11 vs. HEV (Toyota Prius)

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080


Subsidy ($1,000 USD)Pl

ug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)


U.S.China

●

PHEV-‐21 vs. HEV (Ford C-‐Max) 0 5 10 15 200

20406080


Subsidy ($1,000 USD)Pl

ug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)


U.S.China

●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)


U.S.China

●

BEV-‐73 vs. CV (Nissan Leaf vs. Versa)

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)

●


●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)


U.S.China

●

0 5 10 15 200

20406080



Plug−i

n ve

hicl

e sh

are

(%)


U.S.China

●

BEV-‐76 vs. CV (Ford Focus) BEVs more a8rac&ve in China than U.S.

PHEVs a8rac&ve in both countries



Preferences Preferences + Federal Subsidy

Impacts (rela&ve to CVs)

•  PHEVs neutral •  BEVs hard sell

•  PHEVs more aRracFve •  BEVs sFll hard sell

•  Oil consumpFon ê •  Emissions ê

•  No preference PHEVs vs. BEVs

•  Less opposed to BEVs than U.S.

•  BEVs more aRracFve than PHEVs

•  Oil consumpFon ê •  Emissions (éê?)

China Policy: Oil Dependency, Emissions ?

16 August 05, 2014

U.S.:

China:

Life cycle electricity GHG intensity (g CO2−eq/kWh)0 200 400 600 800 1000

0

50

100

150

200

250

300

Life

cyc

le G

HG

s (g

CO

2−eq

/km

)

BEV

CV

HEV

PHEV30

PHEV60

● ● ● ●Natural gasNatural gasNatural gasNatural gasNatural gasNatural gasNatural gasNatural gasNatural gas CoalCoalCoalCoalCoalCoalCoalCoalCoalLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbonLow−carbon

U.S. AverageChina Average


Increase local (and global) emissions…

?

Technological leadership?:

Increased global incenFves for EVs (Reduced global emissions?)

ê é


Acknowledgements

August 05, 2014 17

This work is funded by: •  The NaFonal Science FoundaFon. •  Ford Motor Company.

Special thanks to:

•  Jiang Zhijie, Zheng Wei, and Zang Ye at the State InformaFon Center in Beijing.

•  Center for Climate and Energy Decision Making.


Contact Info Email: [email protected] Website: www.jhelvy.com Wechat (微信): jhelvy

will subsidies drive electric vehicle adoption? measuring ...phev10 vs. hev (toyota prius) subsidy...

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