Price or performance? A probabilistic choice analysis of the intention to buy electric vehicles in European countries

Traditional choice models perform poorly in understanding the determinants of the adoption of new products. First, data on pioneers and early adopters are biased towards specific performance characteristics of the product and the socio-demographic characteristics of the consumers. Second, surveys on the intention to buy underperform in detecting movements of those who do not intend to buy, who are the majority in the case of new products. Probabilistic choice models try to overcome these issues. By using survey data on electric vehicles, we theoretically contribute to this stream of literature and empirically estimate the impact of specific performance improvements and price reduction on the probability of consumers switching from non-intention to buy to intention to buy. Results show that price reduction is the most important triggering factor for the diffusion of electric vehicles, as it determines more than other factors the transition of consumers from the non-intention to the intention to buy an electric vehicle. The improvement in the driving range constitutes the second most important factor for low initial values of the stated intention to buy, while the possibility of recharging at home matters significantly more for consumers with high initial values of the stated intention to buy.