its members are less risk-averse than the general population and more selective than innovators in their enthusiasm for innovations to adopt. Like innovators, they tend to be younger and have higher income levels and social status than other consumers. Early adopters tend to be opinion leaders in their communities and are in the group most looked-to by other consumers for validation of or information about new things. In the automotive arena, Deloitte Development LLC (2010) characterized early adopters for one combination of alternative vehicle and fuel technologies—the battery electric vehicle—as young individuals with annual household incomes of $200,000 or more who consider themselves to be environmentally sensitive and politically involved.

Not all innovators and early adopters will embrace the same products, ideas, or technologies, so technology and policy developers cannot count on the groups as a monolithic 16 percent of the market. Still policy makers and the private auto and fuel industry companies must work together in pursuit of the nation’s GHG and petroleum-use reduction goals. They must be able to attract the interest of a significant portion of these two groups to make inroads with the general consumer base, which Rogers further divided into the early and late majority adopters, each constituting an estimated 34 percent of the consumer base, and the laggards, or last to adopt, constituting the remaining 16 percent of consumers. Rogers determined that innovations achieve peak market penetration with the early majority adopters.

Each of the various groups can be further subdivided into smaller market categories defined by factors such as age, gender, geography, income, social status, and political leanings. Thus, the automotive innovator group might include dedicated environmentalists, older empty-nesters, and “first on the block” ego gratification seekers. The environmentalists would be willing to pay a premium and accept reduced travel range, cargo and passenger capacity, and limited refueling opportunities to acquire vehicles and/or use fuels that they believe would help reduce GHG emissions; the empty nesters might simply wish to free themselves of the expense of purchasing petroleum-based gasoline (and recognize that they no longer need a vehicle that can travel long distances); and the first-on-the-block innovators may simply be those whose egos are gratified by being seen as out in front of the pack in their vehicle choices and whose incomes can support their desires. The success of a new automotive and/or fuel technology or idea will require that the needs of such disparate subgroups be met.

Meeting the needs of all subgroups or selling these new automotive ideas to the early majority will not be easy. Increased utility and convenience cannot be counted on as selling points. The automobile became a successful new technology in the early 20th century because it demonstrated superiority to the horse- and ox-drawn vehicles it would replace. It offered greater speed, greater range, and greater utility than animal-drawn vehicles and promised the individual a new level of freedom of movement (Morris, 2007). With an engine that demanded combustible fuel, the auto also gave the oil industry a whole new market for its product.

If policy makers determine that AFVs are essential to meeting the nation’s oil and GHG reduction goals, then consumers will have to be asked to consider adopting another significant change in personal transportation, but it is one that—at least in the formative stages—means sacrifice, not improvement. The contemplated change is not replacing the horse-drawn buggy with a motorized carriage that can carry its own fuel for hundreds of miles and be refueled in minutes. Rather, it is the swapping of a sizeable portion of conventional, internal-combustion LDVs that run on liquid hydrocarbon fuels and the accompanying nationwide system of fueling stations for a variety of new vehicles and fuels that will require development of massive new production, distribution and retailing systems. In addition, many of these new AFVs use powertrains—such as plug-in hybrid electric (PHEV) systems—that typically cost more and offer no improvements other than increased fuel efficiency, reduced emissions, and, in the case of plug-in vehicles, cheaper fuel costs for the electricity used to charge the batteries. Battery electric vehicles (BEVs) offer less range, and along with PHEVs would require large GHG emissions reductions in the electricity production system to deliver meaningful net GHG reductions for the LDV sector. Some options, however, such as the drop-in biofuels described in Chapter 3, entail few if any customer acceptance challenges for the vehicles, which can still use internal combustion engines. In this case, the technology challenges are upstream in the fuel supply sector, with implications for the fuel costs experienced by LDV consumers.

This chapter examines demonstrated results and stated preference surveys, with stated preference surveys in the forefront because, as many of the vehicle and fuel types under consideration are not yet in the market, there has been little opportunity for researchers to conduct studies of demonstrated preferences. The preference surveys, particularly in environmental matters, have a certain level of bias engendered by respondents’ wish to appear environmentally responsible even if economic conditions rather than environmental beliefs ultimately determine their actions (Kotchen and Reiling, 2000), but the impact of such biases—which remains unquantifiable (Hensher, 2010)—does not materially affect their value in illustrating general trends over time.

4.1 LDV PURCHASE DRIVERS

There is no big mystery at work in the LDV-buying decision process. Consumers typically acquire things for a range of reasons. In the case of LDVs, research has shown that the bulk of purchases revolve around perceived need—to replace an aging vehicle, for instance. “Desires,” whether for a different color or body style, improved “infotainment” content, a more prestigious nameplate, or simply a newer model, still account for a significant minority of purchase decisions,



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