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Future Potential of Hybrid and Diesel Powertrains in the U.S. Light-Duty Vehicle Market

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Author Info

  • David L. Greene

    (Oak Ridge National Laboratory)

  • K.G. Duleep

    (Energy & Environmental Analysis, Inc.)

  • Walter McManus

    (J.D. Power & Associates)

Abstract

Diesel and hybrid technologies each have the potential to increase light-duty vehicle fuel economy by a third or more without loss of performance, yet these technologies have typically been excluded from technical assessments of fuel economy potential on the grounds that hybrids are too expensive and diesels cannot meet Tier 2 emissions standards. Recently, hybrid costs have come down and the few hybrid makes available are selling well. Diesels have made great strides in reducing particulate and nitrogen oxide emissions, and are likely though not certain to meet future standards. In light of these developments, this study takes a detailed look at the market potential of these two powertrain technologies and their possible impacts on light-duty vehicle fuel economy. A nested multinomial logit model of vehicle choice was calibrated to 2002 model year sales of 930 makes, models and engine- transmission configurations. Based on an assessment of the status and outlook for the two technologies, market shares were predicted for 2008, 2012 and beyond, assuming no additional increase in fuel economy standards or other new policy initiatives. Current tax incentives for hybrids are assumed to be phased out by 2008. Given announced and likely introductions by 2008, hybrids could capture 4-7% and diesels 2-4% of the light-duty market. Based on our best guesses for further introductions, these shares could increase to 10-15% for hybrids and 4- 7% for diesels by 2012. The resulting impacts on fleet average fuel economy would be about +2% in 2008 and +4% in 2012. If diesels and hybrids were widely available across vehicle classes, makes, and models, they could capture 40% or more of the light-duty vehicle market.

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File URL: http://128.118.178.162/eps/io/papers/0410/0410003.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 0410003.

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Length: 93 pages
Date of creation: 05 Oct 2004
Date of revision:
Handle: RePEc:wpa:wuwpio:0410003

Note: Type of Document - pdf; pages: 93
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Web page: http://128.118.178.162

Related research

Keywords: diesel; hybrid; vehicle; fuel; gasoline; fuel economy; scenario; technology; environment;

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References

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  1. Kleit, Andrew N, 1990. "The Effect of Annual Changes in Automobile Fuel Economy Standards," Journal of Regulatory Economics, Springer, vol. 2(2), pages 151-72, June.
  2. Burke, Andy & Abeles, Ethan C., 2004. "Feasible CAFE Standard Increases Using Emerging Diesel and Hybrid-Electric Technologies for Light-Duty Vehicles in the United States," Institute of Transportation Studies, Working Paper Series qt3dp4r3bs, Institute of Transportation Studies, UC Davis.
  3. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
  4. McCarthy, Patrick S, 1996. "Market Price and Income Elasticities of New Vehicles Demand," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 543-47, August.
  5. Bordley, Robert, 1994. "An overlapping choice set model of automotive price elasticities," Transportation Research Part B: Methodological, Elsevier, vol. 28(6), pages 401-408, December.
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Citations

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Cited by:
  1. Diamond, David, 2009. "The impact of government incentives for hybrid-electric vehicles: Evidence from US states," Energy Policy, Elsevier, vol. 37(3), pages 972-983, March.
  2. Cayla, Jean-Michel & Maizi, Nadia & Marchand, Christophe, 2011. "The role of income in energy consumption behaviour: Evidence from French households data," Energy Policy, Elsevier, vol. 39(12), pages 7874-7883.
  3. McManus, Walter, 2006. "Can proactive fuel economy strategies help automakers mitigate fuel price risk?," MPRA Paper 3460, University Library of Munich, Germany.
  4. repec:hal:journl:halshs-00207392 is not listed on IDEAS
  5. Lutsey, Nicholas P., 2008. "Prioritizing Climate Change Mitigation Alternatives: Comparing Transportation Technologies to Options in Other Sectors," Institute of Transportation Studies, Working Paper Series qt5rd41433, Institute of Transportation Studies, UC Davis.
  6. Goedecke, Martin & Therdthianwong, Supaporn & Gheewala, Shabbir H., 2007. "Life cycle cost analysis of alternative vehicles and fuels in Thailand," Energy Policy, Elsevier, vol. 35(6), pages 3236-3246, June.
  7. McManus, Walter, 2007. "Economic analysis of feebates to reduce greenhouse gas emissions from light vehicles for California," MPRA Paper 3461, University Library of Munich, Germany.

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