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Willingness to Pay for Electric Vehicles and their Attributes
Resource and Energy Economcs (2011)
  • Michael K Hidrue, Mississippi State University
  • George R Parsons, University of Delaware
  • Willett Kempton, University of Delaware
  • Meryl Gardner, University of Delaware
Abstract

This paper presents a stated preference study of electric vehicle choice using data from a national survey. In our choice experiment, 3029 respondents chose between their preferred gasoline vehicle and two electric versions of their preferred gasoline vehicle. Using the response data we valued five electric vehicle attributes: driving range, charging time, fuel cost saving, pollution reduction, and performance. Driving range, fuel savings, and charging time led in importance to respondents. Individuals were willing to pay (wtp) from $35 to $75 for a mile of added driving range, with incremental wtp per mile decreasing at higher distances. They were willing to pay from $425 to $3250 per hour reduction in charging time (for a 50 mile charge). Respondents capitalized about 5 years of fuel saving into the purchase price of an electric vehicle. We simulated our model over a range of electric vehicle configurations and found that people with the highest values for electric vehicles were willing to pay a premium above their wtp for a gasoline vehicle that ranged from $6,000 to $16,000 depending on the attributes of the vehicle. At the same time, our results suggest that battery cost must drop significantly before electric vehicles will find a mass market without subsidy.

Keywords
  • Stated Preference,
  • Choice Modeling,
  • Electric Vehicles
Publication Date
2011
Citation Information
Michael K Hidrue, George R Parsons, Willett Kempton and Meryl Gardner. "Willingness to Pay for Electric Vehicles and their Attributes" Resource and Energy Economcs Vol. 33 (2011)
Available at: http://works.bepress.com/george_parsons/29/