Subscribing to new technology: consumer preferences for short-term ownership of electric vehicles

Broader adoption of battery electric vehicles (BEVs) and reductions in household car ownership are key to meeting climate goals. Yet, BEV market shares remain low in most countries, and car sharing systems tend to appeal to a limited demographic. In this research we examine a novel ownership option that allows households more flexibility in car ownership: short-term vehicle subscriptions that provide users with exclusive access to a vehicle for 6-12 months and incorporate soft costs such as insurance and maintenance. We investigate whether subscriptions can appeal to distinct segments of the population and whether preferences for subscriptions compared to purchases differ between fuel types. Among other factors, we consider the role of drivers' self-identity as technology enthusiasts and environmentalists. Data are collected through a discrete choice experiment with 1,567 individuals in three US states. An integrated latent class and latent variable choice model indicates the presence of three distinct classes: one motivated by preference for ownership, one motivated by a combination of enthusiasm for new technology and care for the environment, and one motivated by cost concerns. While the subscription option is never appealing to the ownership-oriented class, we find a preference for subscribing to a BEV rather than purchasing it among the class that is both technology-oriented and environmentally conscious. Furthermore, while the cost-oriented class would be averse to subscribing to a conventional vehicle, it is not averse to a BEV or hybrid vehicle subscription. This suggests that subscription models could allow consumers who are unwilling to commit to purchasing a BEV to gather experience with one.

Automated summary

The study suggests that short-term vehicle subscriptions can meet the needs of different population segments, especially those who are technology-oriented and environmentally conscious, as they are more inclined to subscribe to battery electric vehicles (BEVs). Additionally, the cost-oriented segment is not averse to subscribing to BEVs or hybrid vehicles, indicating that subscription models can provide them with the opportunity to gain experience with electric vehicles.