Impact of Car Specifications, Prices, and Incentives for Electric Vehicles in Norway: Choices of Heterogeneous Consumers

Conference poster, 2016

Electric vehicles (EVs), specifically Battery EVs (BEVs), can offer significant energy and emission savings over internal combustion engine based vehicles. Norway has a long history of research and government incentives for BEVs. The BEV market and ample data sets in Norway allow us to fully examine consumers' BEV choices influenced by car specifications, prices and government incentives (public bus lanes access, toll waivers and charging stations). To capture the choices of heterogeneous personal consumers and business buyers, we use Random-Coefficient Discrete Choice Model (referred to BLP model). Our study is instantiated on the entire BEV sales data in Norway from 2011 to 2013, as well as demographics information at municipality level. The results suggest significant positive effects of BEV technology improvement, toll waivers and charging station density on BEV sales for both personal consumers and business buyers, except that bus lanes access may have a negative impact for personal consumers, possibly due to consumers' concern regarding bus lane congestion. The effects on business buyers are generally less pronounced than on personal consumers. In addition, we find significant heterogeneity in consumer preferences over BEV price and car specifications. In particular, a 9,500 NOK increases in consumer income can lead to approximately 10% decrease in price sensitivity on average. In other words, individual consumers with higher income would be less price-sensitive than those with lower income. Significant heterogeneity in incentive policy impacts on different brands are also found, especially for Renault, Ford, Nissan (all three being a good compromise of prices and ranges) and Tesla (with an exceptionally long range)