Transition to Electric Vehicles In the California Automobile Industry

This dissertation presents a comprehensive study on the market adoption of electric vehicle and policy impact of the Zero Emission Vehicle (ZEV) mandate in the California automotive market. This research is primarily consisting of three parts. The author first built a technology innovation pricing model based on multi-nomial logit modelling method. This studies the dynamics among customer preferences, market acceptance and policy impact on vehicle pricing in the California automotive market. Results show that the ZEV mandate could profoundly enhance the market adoption of electric vehicles. There is a threshold on the magnitude of policy intervention. If the number of credits per vehicle is less than the threshold, increasing intervention promotes the EV market penetration; however, beyond the threshold, policy primarily benefits automakers.

In the second step, the author presents a decision model for electric vehicle attributes. This research first characterizes the market adoption rate of electric vehicle models under government subsidy and derives optimal vehicle attributes with respect to consumers' preferences and product-based subsidy. The proposed model was then applied to the California's automotive market. Our results also suggest that industry leaders and followers may choose different product strategy and market segments due to different battery manufacturing costs.

In the last part, the author constructed a series of scenarios for the transition to battery electric cars and used the Market Acceptance of Advanced Automotive Technologies model to analyze the price competition in the California electric vehicle market. Considering the ZEV mandate already in place, this part investigates the role of this regulation in influencing the pricing decisions of different electric vehicle models and enhancing the overall market adoption rate. It was found that the 200-mile range electric vehicle had remarkable unilateral influence on the pricing of the 100-mile range electric vehicle. It suggests that the 200-mile range electric vehicle will become the core driving force in electric vehicle diffusion in the California electric vehicle market. The ZEV mandate remarkably reduced the prices of both models and increased corresponding annual demand. However, this policy showed considerable influence of changing the structure of the California electric vehicle market.