Project Summary
With California Air Resources Board's legislation of Low Emission Vehicle (LEV) and Zero Emission Vehicle (ZEV) mandates in 1990, and with California legislative acts AB 32 and SB 375 more recently, there have been positive expectations for Alternative Fuel Vehicles (AFVs) adoption. In this project we present an approach for addressing the demand for AFVs by explicitly incorporating dynamics and normative influences in a utility maximizing framework. Rather than attempting to predict the dynamics of demand associated with any particular AFV, the project will focus on identifying stable "final" states that are likely to be achievable vis-a-vis assumed vehicle characteristics , supply environment, and normative influences. Put simply, we ask the question "Under what circumstances would the competition among the various alternative fuel alternatives lead to a stable equilibrium in which those vehicles have a certain share of the market." The main objective of this project is to assess the conditions under which certain classes of AFVs can be expected to find at least a niche market within the fleet of vehicles purchased by consumers. In attacking this problem, we first attempt to quantify the role of the so-called "bandwagon" effect evident in consumers' adoption of the Toyota Prius. Then, incorporating this effect, together with supply-side conditions related to the refueling of AFVs, into a dynamic demand model, we seek to identify conditions leading to possible stable equilibria in which AFVs (or a subset of such AFVs) are significantly represented in the vehicle fleet. This assessment the dynamics of AFV adoption possibilities will provide a benchmark that will assist in determining the potential impacts of future AFV penetration into the automobile market.