The Household Market for Electric Vehicles: Testing the Hybrid Household Hypothesis--A Reflively Designed Survey of New-car-buying, Multi-vehicle California Households

We report the results of a survey of the potential demand for electric vehicles (EVs) among a subset of California households. We limit our analysis to one group of potential hybrid households. These households own two or more light duty vehicles and buy new vehicles of the body styles we expect will be offered as electric vehicles. These characteristics identify households who may be able to incorporate at least one limited range vehicle into their hosehold vehicle holdings with no, or minimal, affect on household lifestyle choices. We define hybrid households to be those households that choose an electric vehicle in the choice exercises in the survey. We formulate our central research question as the hybrid household hypothesis. It states that potential hybrid households will choose to include at least one EV in their household fleet of vehicles, thus becoming hybrid households. We believe that this subset of potential hybrid households buys between 35 and 45 percent of all new, light-duty vehicles sold in California every year. The survey instrument was administered to households who belong to this subset of households in 6 metropolitan areas of California. Four hundred and fifty-four households completed and returned the questionnaire. The hybrid household hypothesis is supported by our respondents' choices. In two different choice scenarios, nearly half our sample indicates they would choose an electric vehicle as their next new vehicle. Even among those who indicate their next new vehicle would be either a gasoline or natural gas vehicle, some indicate they would choose an EV at some point in the future. Based on the responses to the vehicle choise exercises and on the share of the market that our sample represents, we find the market potential for EVs to be 13 to 15 percent of the annual new light-duty vehicle market in California. Based on past annual sales of 1.4 million new, light-duty vehicles in California (a typical market during the past few years), the EV market share represents between 186,000 and 213,000 vehicles annually. This is subject to several assumptions, most importantly that, besides smaller EVs, consumers will be able to choose from midsize EVs that have driving ranges between 60 and 150 miles and that EVs will be priced comparably to gasoline vehicles. Even if the former is not true, and only sub-compact and compact body styles are available, the potential market for EVs among hybrid households will be no less than 7 percent of the new light-duty vehicle market. We belive therefore, there is sufficient household consumer interest in EVs to satisfy the mandated 2 percent level of sales of zero emission vehicles (ZEVs) in the year 1998 as well as the 5 percent level in 2001 given current EV technologies. To meet the mandated level of 10 percent light-duty vehicle sales in the year 2003, will require either that advances in electrical storage technology allow for mid-size electric vehicles with driving ranges of 60 to 150 miles or the sale of sufficient smaller EVs to the market segments not surveyed for this study: comercial and governemtn fleets and households that do not meet the potential hybrid household definition used in this study.