Simulating the market penetration of cars with alternative fuelpowertrain technologies in Italy

Valeri, Eva; Danielis, Romeo · 2014 · OpenAlex-citations

DOI: 10.1016/j.tranpol.2014.10.003

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Summary

This study evaluates the market penetration of alternative fuel vehicles (AFVs) in Italy, addressing the lack of empirical research on consumer preferences for these technologies in the Italian context. The authors investigate how consumers react to new powertrain technologies and assess the effectiveness of public policies, such as subsidies and fuel price adjustments, in promoting AFV adoption. The research focuses on seven specific car models representing different technologies: diesel (Ford Fiesta), gasoline (VW Polo), bi-fuel CNG (Fiat Punto Evo), bi-fuel LPG (Alfa Romeo Mito), hybrid (Toyota Yaris), and two battery electric vehicles (BEVs) with owned (Peugeot iOn) and leased (Renault Zoe) batteries. The methodology employs a two-step approach. First, a stated preference (SP) choice survey was administered via face-to-face interviews in 2013 across three Italian cities (Trieste, Bologna, and Pesaro), collecting data from 121 respondents. The survey included 12 choice experiments per respondent, varying attributes such as purchase price, annual operating cost, range, acceleration, and refueling distance. The data were used to estimate a Multinomial Logit (MNL) model and a Mixed Error Component Logit (MECL) model, with the latter accounting for preference heterogeneity and correlation among alternatives. Second, the estimated parameters were integrated into a Monte Carlo simulation model to predict market shares across 32 socio-economic and behavioral segments, using national statistics to aggregate results. The simulation results reveal that existing Italian government subsidies for low CO2-emitting vehicles primarily benefit diesel cars, specifically the Ford Fiesta, rather than AFVs. Standalone improvements to BEV technology, such as a three-fold increase in driving range, would not significantly alter their market share, which remains around 2%. However, a combined policy scenario involving a €5,000 purchase subsidy, a €5,000 reduction in BEV purchase price, increased battery range, and higher conventional fuel prices could raise the BEV market share to approximately 15%. The study also notes that the sample may over-represent educated, younger, and wealthier individuals, potentially leading to an over-prediction of AFV adoption. The findings highlight the limited effectiveness of current policies in promoting electric vehicles in Italy and suggest that significant market penetration requires a combination of financial incentives, technological improvements, and fuel price adjustments. The study contributes to the international literature by providing a detailed simulation framework for the Italian market and demonstrating that conventional vehicles will likely dominate unless dramatic changes in technology and relative prices occur. The results offer actionable insights for policymakers aiming to reduce oil dependence and pollution, emphasizing the need for comprehensive strategies rather than isolated interventions.

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