Perception towards electric vehicles and the impact on consumers' preference

Relative advantage, or the degree to which a new technology is perceived to be better than an existing technology which is being replaced, has a significant impact on individuals' decisions on when, how and to what extent to adopt. An integrated choice and latent variable model is used, in this paper, to explicitly measure the perceived advantages in electric vehicles over the conventional internal combustion engine vehicles. The analysed data is obtained from a stated preference survey including 1076 residents in New South Wales, Australia. According to the results, the latent component of the model disentangles the perceived advantages across three dimensions of vehicle design, impact on the environment, and safety. These latent variables are interacted with price, driving range and body type, respectively, to capture the impact of perception on preference. The developed model is then used to examine the effectiveness of different support schemes on Millennials (Gen Y), the generation before them (Gen X) and after them (Gen Z). The results show higher probability of adopting electric vehicles for Gen Y, compared to Gen X and Z. Gen Y is found to be the least sensitive cohort to purchase price, and Gen X to be the most sensitive cohort to this attribute. People are more sensitive to incentives for the initial price compared to ongoing incentives for operating costs. Also, offering financial incentives to consumers as a rebate on the purchase price is more effective than allocating the same incentive to manufacturers to reduce the purchase price.