IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2101.08008.html
   My bibliography  Save this paper

Willingness to Pay and Attitudinal Preferences of Indian Consumers for Electric Vehicles

Author

Listed:
  • Prateek Bansal
  • Rajeev Ranjan Kumar
  • Alok Raj
  • Subodh Dubey
  • Daniel J. Graham

Abstract

Consumer preference elicitation is critical to devise effective policies for the diffusion of electric vehicles (EVs) in India. This study contributes to the EV demand literature in the Indian context by (a) analysing the EV attributes and attitudinal factors of Indian car buyers that determine consumers' preferences for EVs, (b) estimating Indian consumers' willingness to pay (WTP) to buy EVs with improved attributes, and c) quantifying how the reference dependence affects the WTP estimates. We adopt a hybrid choice modelling approach for the above analysis. The results indicate that accounting for reference dependence provides more realistic WTP estimates than the standard utility estimation approach. Our results suggest that Indian consumers are willing to pay an additional USD 10-34 in the purchase price to reduce the fast charging time by 1 minute, USD 7-40 to add a kilometre to the driving range of EVs at 200 kilometres, and USD 104-692 to save USD 1 per 100 kilometres in operating cost. These estimates and the effect of attitudes on the likelihood to adopt EVs provide insights about EV design, marketing strategies, and pro-EV policies (e.g., specialised lanes and reserved parking for EVs) to expedite the adoption of EVs in India.

Suggested Citation

  • Prateek Bansal & Rajeev Ranjan Kumar & Alok Raj & Subodh Dubey & Daniel J. Graham, 2021. "Willingness to Pay and Attitudinal Preferences of Indian Consumers for Electric Vehicles," Papers 2101.08008, arXiv.org, revised May 2021.
    • Handle: RePEc:arx:papers:2101.08008
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2101.08008
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ericka Costa & Dario Montemurro & Diego Giuliani, 2019. "Consumers’ willingness to pay for green cars: a discrete choice analysis in Italy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(5), pages 2425-2442, October.
    2. Awasthi, Abhishek & Venkitusamy, Karthikeyan & Padmanaban, Sanjeevikumar & Selvamuthukumaran, Rajasekar & Blaabjerg, Frede & Singh, Asheesh K., 2017. "Optimal planning of electric vehicle charging station at the distribution system using hybrid optimization algorithm," Energy, Elsevier, vol. 133(C), pages 70-78.
    3. Bergantino, Angela S. & Bierlaire, Michel & Catalano, Mario & Migliore, Marco & Amoroso, Salvatore, 2013. "Taste heterogeneity and latent preferences in the choice behaviour of freight transport operators," Transport Policy, Elsevier, vol. 30(C), pages 77-91.
    4. Bansal, Prateek & Kockelman, Kara M. & Schievelbein, Will & Schauer-West, Scott, 2018. "Indian vehicle ownership and travel behavior: A case study of Bengaluru, Delhi and Kolkata," Research in Transportation Economics, Elsevier, vol. 71(C), pages 2-8.
    5. Abotalebi, Elnaz & Scott, Darren M. & Ferguson, Mark R., 2019. "Why is electric vehicle uptake low in Atlantic Canada? A comparison to leading adoption provinces," Journal of Transport Geography, Elsevier, vol. 74(C), pages 289-298.
    6. Dimitropoulos, Alexandros & Rietveld, Piet & van Ommeren, Jos N., 2013. "Consumer valuation of changes in driving range: A meta-analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 55(C), pages 27-45.
    7. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    8. Ben-Akiva, Moshe & McFadden, Daniel & Train, Kenneth & Börsch-Supan, Axel, 2002. "Hybrid Choice Models: Progress and Challenges," Sonderforschungsbereich 504 Publications 02-29, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    9. Brownstone, David & Bunch, David S. & Train, Kenneth, 2000. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 34(5), pages 315-338, June.
    10. Danielis, Romeo & Rotaris, Lucia & Giansoldati, Marco & Scorrano, Mariangela, 2020. "Drivers’ preferences for electric cars in Italy. Evidence from a country with limited but growing electric car uptake," Transportation Research Part A: Policy and Practice, Elsevier, vol. 137(C), pages 79-94.
    11. Choi, Hyunhong & Shin, Jungwoo & Woo, JongRoul, 2018. "Effect of electricity generation mix on battery electric vehicle adoption and its environmental impact," Energy Policy, Elsevier, vol. 121(C), pages 13-24.
    12. Azarafshar, Roshanak & Vermeulen, Wessel N., 2020. "Electric vehicle incentive policies in Canadian provinces," Energy Economics, Elsevier, vol. 91(C).
    13. Andrew Daly & Stephane Hess & Kenneth Train, 2012. "Assuring finite moments for willingness to pay in random coefficient models," Transportation, Springer, vol. 39(1), pages 19-31, January.
    14. Cirillo, Cinzia & Liu, Yan & Maness, Michael, 2017. "A time-dependent stated preference approach to measuring vehicle type preferences and market elasticity of conventional and green vehicles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 294-310.
    15. Ardeshiri, Ali & Rashidi, Taha Hossein, 2020. "Willingness to pay for fast charging station for electric vehicles with limited market penetration making," Energy Policy, Elsevier, vol. 147(C).
    16. Mohammed H. Alemu & Søren B. Olsen, 2019. "Linking Consumers’ Food Choice Motives to their Preferences for Insect‐based Food Products: An Application of Integrated Choice and Latent Variable Model in an African Context," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(1), pages 241-258, February.
    17. Axsen, Jonn & Mountain, Dean C. & Jaccard, Mark, 2009. "Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles," Institute of Transportation Studies, Working Paper Series qt02n9j6cv, Institute of Transportation Studies, UC Davis.
    18. Bhat, Chandra R. & Dubey, Subodh K., 2014. "A new estimation approach to integrate latent psychological constructs in choice modeling," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 68-85.
    19. Brownston, David & Bunch, David S. & Train, Kenneth, 1999. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," University of California Transportation Center, Working Papers qt7rf7s3nx, University of California Transportation Center.
    20. Axsen, Jonn & Mountain, Dean C. & Jaccard, Mark, 2009. "Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles," Resource and Energy Economics, Elsevier, vol. 31(3), pages 221-238, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bhat, Furqan A. & Tiwari, Gaurav Yash & Verma, Ashish, 2024. "Preferences for public electric vehicle charging infrastructure locations: A discrete choice analysis," Transport Policy, Elsevier, vol. 149(C), pages 177-197.
    2. Zhao, Xingrong & Ma, Ye & Shao, Shuai & Ma, Tieju, 2022. "What determines consumers' acceptance of electric vehicles: A survey in Shanghai, China," Energy Economics, Elsevier, vol. 108(C).
    3. Tan, Yang & Fukuda, Hiroatsu & Li, Zhang & Wang, Shuai & Gao, Weijun & Liu, Zhonghui, 2022. "Does the public support the construction of battery swapping station for battery electric vehicles? - Data from Hangzhou, China," Energy Policy, Elsevier, vol. 163(C).
    4. Paweł Bryła & Shuvam Chatterjee & Beata Ciabiada-Bryła, 2022. "Consumer Adoption of Electric Vehicles: A Systematic Literature Review," Energies, MDPI, vol. 16(1), pages 1-16, December.
    5. Almansour, Mohammed, 2022. "Electric vehicles (EV) and sustainability: Consumer response to twin transition, the role of e-businesses and digital marketing," Technology in Society, Elsevier, vol. 71(C).
    6. Dubey, Subodh & Sharma, Ishant & Mishra, Sabyasachee & Cats, Oded & Bansal, Prateek, 2022. "A General Framework to Forecast the Adoption of Novel Products: A Case of Autonomous Vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 165(C), pages 63-95.
    7. Callejas, Jerónimo & Linn,Joshua Abraham & Steinbuks,Jevgenijs, 2022. "Welfare and Environmental Benefits of Electric Vehicle Tax Policies in DevelopingCountries : Evidence from Colombia," Policy Research Working Paper Series 10001, The World Bank.
    8. Jaržemskis Andrius & Jaržemskienė Ilona, 2022. "European Green Deal Implications on Country Level Energy Consumption," Folia Oeconomica Stetinensia, Sciendo, vol. 22(2), pages 97-122, December.
    9. Haidi Han & Shanxia Sun, 2024. "Identifying Heterogeneous Willingness to Pay for New Energy Vehicles Attributes: A Discrete Choice Experiment in China," Sustainability, MDPI, vol. 16(7), pages 1-24, April.
    10. Kim, Eui-Jin & Bansal, Prateek, 2024. "A new flexible and partially monotonic discrete choice model," Transportation Research Part B: Methodological, Elsevier, vol. 183(C).
    11. Fatemeh Nazari & Abolfazl Mohammadian & Thomas Stephens, 2023. "Exploring the Role of Perceived Range Anxiety in Adoption Behavior of Plug-in Electric Vehicles," Papers 2308.10313, arXiv.org.
    12. Ashok Kumar Sar, 2023. "Price estimation for Amazon Prime video in India," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(4), pages 312-318, August.
    13. Unnati Tuladhar & Nuttaya Yuangyai & Theerakamol Pengsakul & Saroj Gyawali, 2023. "The Determination of Willingness to Pay for Electrical Vehicles: A Literature Review," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 425-431, September.
    14. Visaria, Anant Atul & Jensen, Anders Fjendbo & Thorhauge, Mikkel & Mabit, Stefan Eriksen, 2022. "User preferences for EV charging, pricing schemes, and charging infrastructure," Transportation Research Part A: Policy and Practice, Elsevier, vol. 165(C), pages 120-143.
    15. Deka, Chayasmita & Dutta, Mrinal Kanti & Yazdanpanah, Masoud & Komendantova, Nadejda, 2023. "Can gain motivation induce Indians to adopt electric vehicles? Application of an extended theory of Planned Behavior to map EV adoption intention," Energy Policy, Elsevier, vol. 182(C).
    16. Krishnan, V. Vijai & Sreekumar, M., 2023. "An integrated behavioral approach to analyze the adoption of electric vehicles in the context of a developing country," Transport Policy, Elsevier, vol. 142(C), pages 162-172.
    17. Srivastava, Ankur & Gautam, Vikas & Sharma, Vikram, 2023. "Does consideration for future consequences matter in consumer decision to rent electric vehicles?," Energy Policy, Elsevier, vol. 181(C).
    18. Shi, Lei & Wu, Rongxin & Lin, Boqiang, 2023. "Where will go for electric vehicles in China after the government subsidy incentives are abolished? A controversial consumer perspective," Energy, Elsevier, vol. 262(PA).
    19. Iogansen, Xiatian & Wang, Kailai & Bunch, David & Matson, Grant & Circella, Giovanni, 2023. "Deciphering the factors associated with adoption of alternative fuel vehicles in California: An investigation of latent attitudes, socio-demographics, and neighborhood effects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 168(C).
    20. Qian, Lixian & Huang, Youlin & Tyfield, David & Soopramanien, Didier, 2023. "Dynamic consumer preferences for electric vehicles in China: A longitudinal approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    21. Bhat, Furqan A. & Verma, Ashish, 2024. "Electric two-wheeler adoption in India – A discrete choice analysis of motivators and barriers affecting the potential electric two-wheeler buyers," Transport Policy, Elsevier, vol. 152(C), pages 118-131.
    22. Li, Ping & Zhang, ZhongXiang, 2023. "The effects of new energy vehicle subsidies on air quality: Evidence from China," Energy Economics, Elsevier, vol. 120(C).
    23. Chakraborty, Rahul & Chakravarty, Sujoy, 2023. "Factors affecting acceptance of electric two-wheelers in India: A discrete choice survey," Transport Policy, Elsevier, vol. 132(C), pages 27-41.
    24. Munshi, Talat & Dhar, Subash & Painuly, Jyoti, 2022. "Understanding barriers to electric vehicle adoption for personal mobility: A case study of middle income in-service residents in Hyderabad city, India," Energy Policy, Elsevier, vol. 167(C).
    25. Jia, Wenjian & Jiang, Zhiqiu & Wang, Qian & Xu, Bin & Xiao, Mei, 2023. "Preferences for zero-emission vehicle attributes: Comparing early adopters with mainstream consumers in California," Transport Policy, Elsevier, vol. 135(C), pages 21-32.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bansal, Prateek & Kumar, Rajeev Ranjan & Raj, Alok & Dubey, Subodh & Graham, Daniel J., 2021. "Willingness to pay and attitudinal preferences of Indian consumers for electric vehicles," Energy Economics, Elsevier, vol. 100(C).
    2. Gabriela D. Oliveira & Luis C. Dias, 2019. "Influence of Demographics on Consumer Preferences for Alternative Fuel Vehicles: A Review of Choice Modelling Studies and a Study in Portugal," Energies, MDPI, vol. 12(2), pages 1-33, January.
    3. Hackbarth, André & Madlener, Reinhard, 2016. "Willingness-to-pay for alternative fuel vehicle characteristics: A stated choice study for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 89-111.
    4. Helveston, John Paul & Feit, Elea McDonnell & Michalek, Jeremy J., 2018. "Pooling stated and revealed preference data in the presence of RP endogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 109(C), pages 70-89.
    5. Jia, Wenjian & Chen, T. Donna, 2023. "Investigating heterogeneous preferences for plug-in electric vehicles: Policy implications from different choice models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 173(C).
    6. Helveston, John Paul & Liu, Yimin & Feit, Elea McDonnell & Fuchs, Erica & Klampfl, Erica & Michalek, Jeremy J., 2015. "Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 96-112.
    7. Yang, J. & Chen, F., 2021. "How are social-psychological factors related to consumer preferences for plug-in electric vehicles? Case studies from two cities in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    8. Egnér, Filippa & Trosvik, Lina, 2018. "Electric vehicle adoption in Sweden and the impact of local policy instruments," Energy Policy, Elsevier, vol. 121(C), pages 584-596.
    9. Bigerna, S. & Bollino, C.A. & Micheli, S. & Polinori, P., 2017. "Revealed and stated preferences for CO2 emissions reduction: The missing link," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1213-1221.
    10. Rotaris, Lucia & Giansoldati, Marco & Scorrano, Mariangela, 2021. "The slow uptake of electric cars in Italy and Slovenia. Evidence from a stated-preference survey and the role of knowledge and environmental awareness," Transportation Research Part A: Policy and Practice, Elsevier, vol. 144(C), pages 1-18.
    11. ILes, Richard, 2017. "Government Doctor Absenteeism And Its Effects On Consumer Demand In Rural North India," Working Papers 2018-9, School of Economic Sciences, Washington State University, revised 12 2018.
    12. Axsen, Jonn & Kurani, Kenneth S., 2013. "Hybrid, plug-in hybrid, or electric—What do car buyers want?," Energy Policy, Elsevier, vol. 61(C), pages 532-543.
    13. Ko, Sungmin & Shin, Jungwoo, 2023. "Projection of fuel cell electric vehicle demand reflecting the feedback effects between market conditions and market share affected by spatial factors," Energy Policy, Elsevier, vol. 173(C).
    14. Makena Coffman & Paul Bernstein & Sherilyn Wee, 2017. "Electric vehicles revisited: a review of factors that affect adoption," Transport Reviews, Taylor & Francis Journals, vol. 37(1), pages 79-93, January.
    15. Kim, Sung Hoo & Mokhtarian, Patricia L., 2023. "Finite mixture (or latent class) modeling in transportation: Trends, usage, potential, and future directions," Transportation Research Part B: Methodological, Elsevier, vol. 172(C), pages 134-173.
    16. J�r�me Massiani, 2013. "The use of Stated Preferences to forecast alternative fuel vehicles market diffusion: Comparisons with other methods and proposal for a Synthetic Utility Function," Working Papers 2013:12, Department of Economics, University of Venice "Ca' Foscari".
    17. Achtnicht, Martin & Bühler, Georg & Hermeling, Claudia, 2008. "Impact of Service Station Networks on Purchase Decisions of Alternative-fuel Vehicles," ZEW Discussion Papers 08-088, ZEW - Leibniz Centre for European Economic Research.
    18. Andreas Ziegler, 2010. "Individual Characteristics and Stated Preferences for Alternative Energy Sources and Propulsion Technologies in Vehicles: A Discrete Choice Analysis," CER-ETH Economics working paper series 10/125, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    19. Liu, Yan & Cirillo, Cinzia, 2018. "A generalized dynamic discrete choice model for green vehicle adoption," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PB), pages 288-302.
    20. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2101.08008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.