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Ecological Economics 107 (2014) 411–421

Contents lists available at ScienceDirect

Ecological Economics
journal homepage: www.elsevier.com/locate/ecolecon

Methodological and Ideological Options

Modelling market diffusion of electric vehicles with real world


driving data — Part I: Model structure and validation
Patrick Plötz ⁎, Till Gnann, Martin Wietschel
Fraunhofer Institute for Systems and Innovation Research ISI, Breslauer Strasse 48, 76139 Karlsruhe, Germany

a r t i c l e i n f o a b s t r a c t

Article history: The future market diffusion of electric vehicles (EVs) is of great importance for transport related green house gas
Received 30 April 2014 emissions and energy demand. But most studies on the market diffusion of EVs focus on average driving patters
Received in revised form 12 September 2014 and neglect the great variations in daily driving of individuals present in real-world driving data. Yet these var-
Accepted 14 September 2014
iations are important for EVs since range limitations and the electric driving share of plug-in hybrids strongly im-
Available online 26 September 2014
pact the economic evaluation and consumer acceptance of EVs. Additionally, studies often focus on private cars
Keywords:
only and neglect that commercial buyers account for relevant market shares in vehicle sales. Here, we propose
Electric vehicles a detailed, user specific model for the market diffusion of EVs and evaluation of EV market diffusion policies
Market diffusion based on real-world driving data. The data and model proposed include both private and commercial users in
Agent-based model Germany and allow the calculation of realistic electric driving shares for all usage patterns. The proposed
Driving data model explicitly includes user heterogeneity in driving behaviour, different user groups, psychological aspects
and the effect of charge-at-home options. Our results show that the proposed model reproduces group specific
market shares, gives confidence bands of market shares and simulates individual electric driving shares.
© 2014 Elsevier B.V. All rights reserved.

1. Introduction could give incorrect results, since individual driving patterns show
great variations both between different users as well as between differ-
Global warming and the increase of greenhouse gas (GHG) emis- ent days for individual users (Amjad et al., 2011; Smith et al., 2011a).
sions are some of the most fundamental challenges of the 21st century This is of particular relevance for EVs for which range limitations and
(Kahn Ribeiro et al., 2007; International Energy Agency (IEA), 2010). electric driving shares have a high impact on the economic evaluation
Especially the transport sector with a growing number of vehicles and consumer acceptance. Additionally, these studies often focus only
worldwide has to make a contribution to reduce GHG emissions radical- on private cars and neglect that commercial buyers have a relevant
ly. Furthermore, the scarcity of conventional energy resources, in partic- market share on selling figures of new vehicles. Their purchase decision
ular crude oil, requires new energy carriers in the transport sector. is also different, e.g. cost-effectiveness is more important for fleet appli-
Electric vehicles (EVs) such as battery (BEV), plug-in hybrid (PHEV) or cations than for private buyers. Furthermore, the average vehicle
range extended EVs (REEVs) are a means to this problem since they kilometres travelled (VKT) of commercial car users are much higher
are more energy efficient than conventional cars and produce less than that of private car users.
GHG emissions when renewable energy is used (International Energy The present paper attempts to elaborate and assess a detailed, user-
Agency (IEA), 2010). specific model for market diffusion of EVs and the evaluation of policies
The diffusion of new technologies and EVs in particular has received influencing EV market diffusion; ‘user-specific’ in the sense that all rel-
considerable attention in the literature (see Al-Alawi and Bradley, 2013) evant buyer groups are represented with their specific purchase behav-
for a recent review of EV market diffusion models). Most of these stud- iour and individual driving patterns. The developed multi-agent-based
ies focus on average driving patterns (Dagsvik et al., 2002; Santini and simulation model is applied to and evaluated for Germany with a time
Vyas, 2005; Keles et al., 2008; Kohler et al., 2010; Lamberson, 2008; horizon until 2020.
Meyer and Winebrake, 2009; Nemry and Brons, 2010; Shepherd et al., In Section 2, the simulation model is described including a critical
2012; Wansart and Schnieder, 2010; Orbach and Fruchter, 2011). This discussion of the model. Selected results and different model validations
are presented in Section 3. We will discuss the model and close with
conclusions in Section 4. A further application of the model with differ-
⁎ Corresponding author. ent market diffusion scenarios for Germany until 2020 can be found in
E-mail address: patrick.ploetz@isi.fraunhofer.de (P. Plötz). Gnann et al.

http://dx.doi.org/10.1016/j.ecolecon.2014.09.021
0921-8009/© 2014 Elsevier B.V. All rights reserved.
412 P. Plötz et al. / Ecological Economics 107 (2014) 411–421

2. Material and Methods: Proposed Model for EV Market Diffusion Table 1


Definition of private adopter groups according to Peters et al. (2011) and their willingness
to pay more (WTPM). Participants in survey answered the indicated questions and were
2.1. Data and Parameters considered members of the four indicated adopter groups. A small number of respondents
answered the questions as no, no, yes and have been excluded from further analysis. The
The model is based on driving profiles which are analysed in the EV numerical values for the WTPM are median values of the group members' answers.
simulation. Here and in the following, a driving profile is defined as all
EV EV Purchase Group Share of Willingness-to-
trips of an individual vehicle including the departure and arrival times user? interest? intention? label users pay-more
as well as the distance travelled together with information about the
Yes – – Innovators 0.5% 30%
purpose of the trip (to work, to home, leisure, shopping, and others) No Yes Yes Early adopters 1.5% 15%
and additional information on the vehicle (size, brand, age, annual No Yes No Majority 48% 10%
VKT) and its owner. No No No Laggards 50% 1%
For private car owners and company cars, we use the German Mobil-
ity Panel (MOP, 2010) which has already been used for EV analyses (see
e.g. Gnann et al., 2012a; Paetz et al., 2013a,b). For commercial users we groups with a different attraction to electric vehicles: (1) users of elec-
use the REM2030 Driving Profiles collected by the authors with GPS tric vehicles, identified as likely innovators, (2) attracted individuals
trackers (Fraunhofer, 2012). Both data sets are described in detail in with purchase intention in the near future, identified as likely early
(Gnann et al., 2012a, 2013a) and are publicly available. We use these adopters, (3) attracted individuals without purchase intention, identi-
data sets as they cover observations of at least one week, which is crucial fied as likely early and late majority, (4) uninterested individuals, iden-
for reliable estimates of vehicle driving behaviour, in particular for EVs tified as likely laggards (cf. Table 1). The four adopter groups were
(see Gnann et al., 2012a; Karlsson and Kullingsjo, 2013; Smith et al., formed by the participants' answers concerning their current vehicle
2011b and Section 3.1). The additional information for the private driv- usage, the interest in EVs, and intention to buy an EV in the near future
ing profiles (including company cars) contains also socio-economic data (see Peters et al., 2011; Dütschke et al., 2011; Plötz et al., Submitted for
about the car owner (age, education, sex, income, city size of residence, publication for details). Our aim is to combine these survey results with
typical over-night parking spot, household size). Similarly, the commer- the driving profiles and to assign each driving profile to one of the four
cial driving data contains additional information about the company adopter groups with their WTPM.
(no. of employees, city size of head quarter location, total number of Members of the four adopter groups differ significantly in socio-
vehicles in fleet). economic variables like household income, employment status, house-
The data set comprises privately owned vehicles as well as commer- hold size, city size and the willingness to accept a higher price for an
cially owned vehicles both for commercial use only (commercial cars) electric vehicle (Peters and Dütschke; Wietschel et al., 2012; Peters
and private and commercial use (company cars). Each of these groups et al., 2011; Dütschke et al., 2011). As the data set also contains informa-
makes up about one third of the annual registrations in Germany tion about age, sex and education of the user groups, we are able to as-
(Nationale Plattform Elektromobilitat (NPE), 2011a). The private and sign each driving profile to one of the four groups according to their
company car driving profiles have been retrieved from publicly avail- resemblance with the other group members (see Section 2.3.2 for de-
able driving data from Germany (Anon.) and consist of all trips during tails and Section 3.2 for a validation of this assignment). The participants
one week of more than 6000 individuals (see below). The driving pro- stated an individual WTPM for EVs. We will use the adopter group aver-
files of commercial vehicles have been collected by the authors and con- age WTPM to include the positive aspects of EVs mentioned earlier. The
sist of all trips of 354 vehicles during three to four weeks and have been percentage WTPM is converted to absolute monetary values by using
described in Fraunhofer (2012) and Gnann et al. (2013a). There are the conventional reference vehicle in that vehicle size (gasoline for
6339 private and company car driving profiles in total. 3727 (58.8%) small and medium-sized vehicle, diesel for large and light duty vehicle
of all private driving profiles contain the annual VKT as stated by the (LDV)). For the individual user, the positive aspects are finally included
owner. All other annual VKT have been extrapolated from the observed in the utility calculation by subtracting the absolute WTPM from the ve-
driving behaviour, i.e. the observed VKT of one week has been multi- hicle list price (LPi in Eq. (3) below). The specific values are summarised
plied by 52 for private users if the annual VKT was not given. For in Table 1.1
commercial fleet vehicles, the annual VKT of each vehicle has been ob- Although the described data set contains about 1000 respondents, it
tained by extrapolation from their individual observation period (with is not representative for the group sizes in Germany (Peters and
an average of 18.9 days). Dütschke; Wietschel et al., 2012), i.e. users of EVs and other EV friendly
An important aspect of an EV utility is the positive non-monetary ef- groups are clearly overrepresented. This is useful for the validity of the
fects of these vehicles. They are perceived as new and innovative and as average WTPM in the groups. To correct the nonrepresentative group
silent and environmentally friendly. These positive aspects of EVs are sizes, we use a second survey representative for private German car
reflected in a willingness-to-pay-more (WTPM) of some users and the buyers (Wesche, 2013; Dütschke et al., 2013). The groups are defined
magnitude of the WTPM depends on the user's position in the adoption in the same way, i.e. according to EV ownership, interest in EVs and pur-
process (Rogers, 1962; Laroche et al., 2001). Of course, a stated chase intention. Since the latter survey is representative, we use it to de-
willingness-to-pay is not equal to the actual willingness-to-pay in a termine the relative size of the adopter groups. The resulting share of
buying decision (Huang et al., 1997; Bradley and Daly, 1991). However, each adopter group is summarised in Table 1.
the stated WTPM gives an indication for the appreciation of a new tech- The different modelling steps require assumptions for techno-
nology and an approximation of the actual WTPM. Using a WTPM is a economical parameters concerning the vehicles (retail prices, specific
common approach in market diffusion models for electric vehicles fuel consumptions, battery sizes and depth-of-discharges (DoD)) as
(Mock, 2010; Eppstein et al., 2011).
To assess a private user's position in the adoption process of EVs and 1
The data on WTPM used here contains only positive values for WTPM. However, stud-
their individual WTPM, we combine two empirical data sets (see Peters ies on willingness-to-pay for EV range show that the limited range of EVs is a major draw-
and Dutschke; Wietschel et al., 2012; Peters et al., 2011, cf. Anon.; back for potential users (Dimitropoulos et al., 2011). Apart from methodological problems
Heupel et al., 2010; Knie, 1999). The purpose of the original survey of many EV range willingness-to-pay studies (the survey participants have not experi-
was to identify and characterise the different adopter groups in the enced EVs) that are met in the WTPM data used here (a noteworthy share of respondents
in Peters and Dütschke has used EVs), the usage of only positive WTPM is valid for our
adoption of EVs according to Rogers' “Diffusion of Innovations” and model since range limitations are explicitly included via the EV simulation. That is, what-
they are thus ideal in assessing the adopter group's WTPM. In these ever a users potential WTPM is, he is excluded from BEV purchase in the model if his driv-
studies the WTPM has been determined independently for four adopter ing exceeds the BEV range.
P. Plötz et al. / Ecological Economics 107 (2014) 411–421 413

Table 2
Technical parameters for the battery simulation. Battery capacities C in kWh, electricity
consumption ce in kWh/100 km and fuel consumption cc in litres/100 km. The sources
and assumptions for these parameter values are described and discussed in Plötz et al.
(2013).

BEV REEV PHEV

Battery size C in kWh and Depth of Discharge (DoD)

C DoD C DoD C DoD

Small 20 90% 13 80% 7 75%


Medium 24 90% 16 80% 10 75%
Large 28 90% 19 80% 13 75%
LDV 32 90% 22 80% 16 75%

Consumption ce in kWh/100 km and cc in litres/100 km

ce cc ce cc ce cc

Small 19.1 – 19.1 6.6 17.8 5.6 Fig. 1. Criteria ranked first in the decision making process for private passenger car
Medium 23.3 – 23.3 8.2 22.0 7.0 purchase differentiated by vehicle size (multiple answers possible).
Large 25.1 – 25.1 10.4 23.8 8.9 Figure is based on data from Peters and de Haan (2006) and refers to conventional
LDV 37.6 – 37.6 12.8 35.0 11.0 vehicles.

well as the car market (annual sales per segment (small, medium, large, depend on the annual VKT and the individual driving pattern, in particular
LDV) and user group (private, commercial, company car) and age- the regularity of driving. For a reliable estimate, each user's driving profile
dependent scrapping probabilities) and framework conditions (fuel, is simulated as a vehicle with each of the propulsion systems (BEV, REEV,
electricity and battery prices). Since the purpose of the present paper is PHEV, diesel and gasoline) and the resulting fuel costs are calculated.
to introduce and discuss our model, the individual techno-economical pa- Fuel type, emission standards and acceleration are different for con-
rameters are not needed. However, for later use in Section 3.1, we sum- ventional internal combustion engine vehicles and electric vehicles. Fur-
marise the assumed battery sizes, DoDs and energy consumptions of thermore, many consumers are willing to pay a price premium for a
the vehicle types in Table 2. The battery sizes and DoDs have been devel- new technology in general (Rogers, 1962) and for EVs in particular
oped in cooperation with the major German car manufacturers (Plötz (Peters and Dütschke; Wietschel et al., 2012). The positive factors of
et al., 2013; Nationale Plattform Elektromobilität (NPE), 2011b) and the EVs such as reduced noise, dynamic driving experience, their novelty
fuel consumptions are based on Helms and Hanusch (2010).2 and innovativeness are integrated in the model proposed here as
willingness-to-pay-more (WTPM) of some users. Other factors are diffi-
2.2. Model Motivation and Overview cult to model and are assumed to be comparable between conventional
and electric vehicles, such as design, safety and engine power.
Buying decisions for passenger cars are complex. Many factors play a Apart from the positive image of EVs as a new technology, EVs show
role, both in private and commercial purchase decisions. Based on a sur- certain limitations. One important factor is the need of frequent
vey of private passenger car buyers (Peters and de Haan, 2006), Fig. 1 recharging caused by the limited electric range of EVs (Tate et al.,
gives an overview of factors ranked first in private users' decision 2008; Kalhammer et al., 2007). To address this issue, we integrate the
making processes. We identify vehicle size, price and safety as the most cost for the primary charging option into the individual buying decision.
important factors in the purchase decision. The importance of the differ- In addition to this, the choice of EVs in terms of brands and models as
ent vehicle attributes motivates us to model the EV purchase decision as offered by manufacturers is still limited and likely to remain so for the
maximisation of utility among several vehicle alternatives. For the future next years. This will certainly restrain some users from buying an EV de-
market diffusion of EVs we focus on the users' utility obtained from vehi- spite their potential benefits. We include this effect of a limited choice of
cle size, price, brand, fuel consumption and fuel type, as well as engine brands into our EV market diffusion model by a two-step process: First,
power, emissions and acceleration. Since our focus is on the vehicle pro- we assume users to stick to their current vehicle brand if possible. Sec-
pulsion technology, we disregard safety, gear shift and four-wheel drive. ond, if an EV would maximise the user's individual utility but is not
In the model proposed here, the potential utility of each technology available from his current manufacturer, then a share of users (depend-
is calculated for each user individually. Furthermore, three user groups ing on the number of brands offering EVs in that year) is assumed to
who differ in their purchase decisions are distinguished: (1) private choose an EV from another manufacturer and the rest of the users are
car buyers, (2) commercial vehicles being used in commercial vehicle assumed to choose their second best vehicle option.
fleets only and (3) company cars which are used by employees One of the most important aspects of our proposed EV market diffu-
for both commercial and private purposes. For Germany each group sion model is the usage of real-world driving profiles. This is a major im-
amounts for about one third of the annual passenger car registrations provement over existing models and has to our knowledge not been
(Nationale Plattform Elektromobilität (NPE), 2011b). We distinguish used comprehensively in an EV market diffusion model so far. The dis-
four vehicle sizes: small, medium, large and light duty vehicles. To take tribution and regularity of trip lengths varies strongly between different
the importance of vehicle size in the vehicles' utility into account, we as- users and influences the TCO and potential use of EVs significantly. We
sume that every user will buy a vehicle of the same size as his current ve- analysed driving profiles of at least one week and found shorter periods
hicle. Purchase price and fuel consumption of a vehicle are aggregated to to be too unreliable to draw conclusions on the potential utility of an in-
the total cost of ownership (TCO). The fuel consumption costs strongly dividual vehicle as EV (Gnann et al., 2012b). Based on the individual
driving profile, each user's vehicle is simulated as gasoline and diesel ve-
2
Typical battery sizes have been chosen for the model and the necessary level of detail hicle and as BEV, PHEV and REEV. The electric driving share as PHEV or
is achieved by differentiating between three electric propulsion technologies and four ve- REEV resulting from the simulation and the annual VKT stated by the
hicle size classes. For further differentiation more assumptions have to be made for all oth- user are used to calculate the individual TCO of each vehicle option for
er vehicle parameters (fuel and electricity consumption, net list prices, etc.) and the gain in
detail is likely to be compensated by loss in accuracy due to more parameter assumptions.
each individual user with his driving profile.
We found variations in battery sizes, e.g. by allowing an individual battery optimisation, to Based on the individual TCO and the additional positive and negative
have a minor effect on the overall model results. factors integrated in the model as user specific utility, the utility
414 P. Plötz et al. / Ecological Economics 107 (2014) 411–421

maximising propulsion technology for each driving profile is chosen. where the battery with capacity C and depth of discharge DoD is initially
Thus, in each user group, a share of driving profiles will correspond to fully charged SOC(0) = C · DoD. The distance driven between t and t +
EVs. This share is then extrapolated to the annual registrations of vehi- Δt is given by dΔt. The consumption of electricity in kWh/km depends on
cles in this user group. The model outputs are the individual utility of the car size and is denoted as ce. Furthermore, P loct in kW describes the
each vehicle technology and the individual purchase decisions in a power for charging at the location where the car was parked at t. If no
given year. The technological and economical parameters vary over charging infrastructure is available, P loct ¼ 0. Note that different battery
time and the decision process is repeated for each year. The annual reg- capacities are used for different vehicle sizes and EV types (cf. Table 2). If
istrations are built up to a stock of EVs via a stock model. the car is driven (dΔt N 0), the battery is discharged by the energy
To summarise, the model is structured as in Fig. 2. There are three needed for driving the distance d Δt. Otherwise (d Δt = 0), it is
main model steps, (1) the EV simulation, (2) the utility calculation charged with the power P loct for the time Δt if charging infrastruc-
and (3) the stock model. Within these steps there are certain parts ture is available (P loct N0). In the simulation, no fixed step width Δt is
where actual user behaviour is integrated. We base the EV simulation used, but the result of each individual trip with its trip duration Δt or
on driving profiles in an infrastructure scenario. Furthermore, the cost the parking duration Δt is used.
for infrastructure, the WTPM and the brand loyalty of each individual We analyse each driving profile by simulating a battery profile by
user are incorporated into the utility calculation. While the first two Eq. (1) to estimate the technical EV potential. This technical EV potential
model steps are done individually for every vehicle driving profile, the delineates whether a BEV would be able to cover the whole driving pro-
stock model aggregates these results to a market diffusion. file and – in the case of a hybrid vehicle (REEV, PHEV) – what electric
driving share si user i would achieve (cf. Gnann et al., 2012a for details
2.3. Formal Description of the Model and Section 3.1 for results). Furthermore, a simulated SOC b 0 for a
BEV indicates that at least one trip (or one chain of trips without charg-
We will now discuss the formal modelling steps in more detail. Some ing infrastructure at intermediate parking spots) of the simulated driv-
of the model steps (the EV simulation and the TCO calculation) have ing profile was longer than the electric driving range of the BEV. The
been published already (Gnann et al., 2012a; Peters and Dütschke; latter means that the particular driving profile cannot be driven with a
Wietschel et al., 2012; Plötz et al., 2012; Kley, 2011) but the other BEV and it will be excluded as vehicle technology option for this user
parts and the combination to an EV market diffusion model are new. to account for the importance of EV range limitations. All technical pa-
The first step of the model is to simulate each vehicle with its individual rameters for the EV battery simulation are given in Table 2.
driving profile as EV. Based on this vehicle simulation, the utility for As mentioned before, EVs are charged when charging infrastructure is
each user of their vehicle with each propulsion technology is calculated available at a parking position. The driving profiles contain information on
individually. Finally, the individual utility-maximising decisions are ag- the purposes of the trips but not their exact location. Hence, we also have
gregated to vehicle sales in a stock model. to define scenarios for charging infrastructure (see Gnann et al., 2012a,
2013a for details on charging infrastructure scenarios). In the following,
2.3.1. EV Simulation we assume that: (1) PHEVs and REEVs drive electrically until the energy
With the driving profiles described above we simulate the state of in the battery is used up completely before the conventional propulsion
charge (SOC) of a battery for a specific point in time t for each user as is used; (2) private and company car owners charge their vehicles with
a power of 3.7 kW whenever they are at home; (3) commercial vehicles
( are only charged overnight with 3.7 kW no matter where they are parked.
n SOCðt Þ−dΔt  ce o d N0
SOCðt þ Δt Þ ¼ for Δt ð1Þ To summarise, the battery simulation is performed for each vehicle
min SOCðt Þ þ Δt  P loct ; C  DoD dΔt ¼ 0
as each EV option for each year. The results are the electric driving

Fig. 2. Overview of the proposed model for the market diffusion of EVs using real-world driving data. Based on individual driving data from private, commercial and company cars (left
panel) and using techno-economical parameters (right panel), the market shares of different propulsion technologies are determined in three steps (central panel): (1) each driving profile
is simulated as EV and conventional vehicle; (2) based on the TCO, the cost for home charging, the limited choice of EV brands and models and the individual willingness-to-pay-more the
utility maximising vehicle option is chosen for each driving profile; (3) the vehicle choices are extrapolated to market shares and aggregated to a vehicle stock.
P. Plötz et al. / Ecological Economics 107 (2014) 411–421 415

shares as PHEV and REEV and the substitutability by BEV for each indi- variables: sex, age, employment status, education, house hold size,
vidual vehicle i. household income and city size (all variables were categorical). That
is, a driving profile could achieve up to seven matches with each of
2.3.2. Total Cost of Ownership and Utility Calculation the survey respondents from a known adopter group. The number of
In a second step the economic potential and utility are determined for matches mijk ≤ 7 of user i with adopter group member j = 1, …, Lk
each driving profile. We calculate each user's total cost of ownership (out of the k = 1, …, 4 groups) were collected and normalised Mik =
(TCO) for different propulsion systems. The annual total cost of ownership ∑ jmijk/(7Lk). The driving profile i should then be assigned to group k
TCOa consists of capital expenditure acapex and operating expenditure where the overlap was the largest Mik N Mil ∀ l ≠ k. However, since
aopex the relative group size should be limited (the number of innovators is
rather small), we took only the top 0.5% (cf. Table 1), i.e. those 0.5%
capex opex
TCOa ¼ a þa : ð2Þ with the largest overlap with the survey innovators, as innovators. The
other potential innovators were then assigned to their second best
We use the discounted cash-flow method with resale values and matching adopter group. The same procedure was applied to the follow-
calculate the investment annuity for user i as ing groups in descending order in the innovation process: innovators,
early adopters, majority and laggards (see Plötz et al., 2013, p. 182 for
capex LPi  ð1 þ pÞT 1 −SPi pð1 þ pÞT 2 computational details). As a result of this algorithm, each driving profile
ai ¼p þ I CIi  : ð3Þ has been positioned in the adoption process according to its socio-
ð1 þ pÞT 1 −1 ð1 þ pÞT 2 −1
demographic variables with an associated WTPM. The validity of this as-
signment is analysed in Section 3.2 below.
The list price LPi (for vehicle and battery) is multiplied by the annu-
To assess the WTPM of commercial vehicle fleets, we used the re-
ity factor consisting of the interest rate p and the investment horizon T1.
sults from a survey of approximately 500 German fleet managers
SPi denotes the sale price of vehicle i for resale after T1 years and
(Anon.). About half the fleet managers stated a WTPM with an average
depends on the vehicle's annual vehicle kilometres travelled (VKT). The
of 10%. Again, this WTPM needs to be assigned to individual commercial
resale value is calculated for each user i with his individual annual VKTi.
vehicle driving profiles. We used company size (measured as number of
We use results of Dexheimer (2003) with SPi ¼ exp ½α þ 12  β1 T 1 þ β2 V
β employees) as a proxy for the position in the adoption process. Since
KTi =12  LPi 3 where the parameters α = 0.97948, β1 = − 1.437 ⋅
larger companies seem more likely to engage early in innovative tech-
10−2, β2 = −1.17 ⋅ 10−4 and β3 = 0.91569 have been obtained by
nologies, commercial vehicles from companies with more than 250 em-
regression of conventional vehicle sales prices (see Dexheimer, 2003 for
ployees were assigned a WTPM of 10%. About 50% of the driving profiles
details) and T1 denotes the vehicle's age in years at the time of resale.3
are from such a company in agreement with the results from Anon..
We use different values for T1 for private and commercial users reflecting
However, a sensitivity analysis showed that the assignment of WTPM
the different average vehicle holding times. The second term describes
to other groups of commercial car owners had no strong effect on the
the investment for the user-specific charging infrastructure ICIi multiplied
model results. No reliable data was available for WTPM of company
by the annuity factor without residual values and its specific investment
car buyers. We assume that company car buyers have zero WTPM and
horizon T2 = 15 years.
use this in the model.
The operating expenditure of user i for one of the propulsion tech-
Since EVs are in an early market phase, the choice of models and
nologies is calculated as
brands is and will remain limited for the next years. This fact slows
opex down the market diffusion of EVs since brand and design are vehicle
ai ¼ VKTi  ðsi ce ke þ ð1−si Þcc kc þ kOM Þ þ ktax þ kCIi : ð4Þ
purchase criteria (cf. Fig. 1). The limited choice of brands and models
is included in the EV market diffusion model proposed here. In a first
We multiply the vehicle kilometres travelled per year by user i step the present and near-future choices of EVs were collected (from
(VKTi) with the cost for driving in electric mode plus the cost for driving press announcements). Announcements for up to two years in the fu-
in conventional mode and the cost for operations and maintenance ture were available. Based on this data and the relevant number of
(kOM). The cost for electric driving consists of the electric driving share brands within each vehicle segment for normalisation, a logistic regres-
si, the electric consumption ce in kWh/km and the cost for electricity sion of the upcoming brands was performed.4
ke in EUR/kWh. The same holds for the conventional driving where The resulting logistic availability function has been extrapolated into
the share of conventional driving (1 − si) is multiplied by the conven- the future. This availability function is integrated into the purchase
tional consumption cc in litres/km and the cost for conventional fuel kc decision as follows: If an EV is TCO optimal for a driver of brand b and
in EUR/l. Finally the annual vehicle taxes ktax in EUR/yr and the annual this brand has announced a vehicle for the year under consideration
operating cost for charging infrastructure kCIi (in EUR/yr) are added.
By adding the infrastructure cost to the TCO calculation, we address 4
The diffusion of innovations and new technologies typically follows an S-shaped curve,
the fact that users must have at least one charging point to charge
well described by a logistic function (Rogers, 1962; Geroski, 2000; van der Vooren and
their vehicle regularly. For private car users, we differentiate between Alkemade, 2010; Massiani, 2010; Meade and Islam, 2006). We assume that the availability
users that have a garage attached to their homes or leave their car on of EVs from different brands can be described by a logistic function, too. That is the share of
the street overnight (this information is part of the driving profile data brands per segment that offers an EV grows logistically over time A(t) = [1 + e −
Gnann et al., 2013b). (t − t0)τ]−1. Here t0 denotes the point in time when 50% of the brands in a given seg-
ment offer an EV and τ is the time scale of change of EV availability. Technically, we
To assign each driving profile to one of the adopter groups with their collected EV announcements from different brands and calculated the cumulative
WTPM we used the following algorithm. For each driving profile, we number of brands per year that already offer or have announced to offer an EV in
first calculate the agreement in socio-demographic characteristics the given year (see Plötz et al., 2013, Ch. 7.4). This cumulative number of brands
with each survey respondent. Matches were collected from seven has been divided by the number of brands active in that segment for normalisation.
For the case of Germany, we chose all brands with non-zero new registrations in
2011 as active (26 brands in the small segment, 32 in medium and 29 in large).
3
Please note that the regression results for the EV resale values imply a higher absolute The parameters of the logistic function to estimate future availability of EVs were ob-
resale price SP but lower relative or percentage resale value RV ≡ SP/LP when compared to tained by least-squares regression and assumed to be partly equal between the
internal combustion engine vehicles. If we assume the vehicle's age and annual VKT fixed groups. Furthermore, PHEVs and REEVs were treated as a single group since from
at average values, the sales price is given as SP ¼ c  LPβ3 with some constant c. Thus the the perspective of availability these vehicles are rather similar and many future an-
relative resale value will be given as RV ≡ SP=LP ¼ c  LPβ3−1 and accordingly RVEV
RVICE ¼ nouncements do not clearly distinguish between the two technologies. The results
 1−β3 for future availability of EVs from different brands in Germany are summarised in
LPICE
LPEV b 1 since LPICE b LPEV and 0 b β3 b 1. Gnann et al.
416 P. Plötz et al. / Ecological Economics 107 (2014) 411–421

(or earlier) the EV will be bought by that user. If the user's brand b does market diffusion models, such as Bass or Gompertz (Geroski, 2000),
not offer an EV, then some of the users choose an EV from a different are used. The statistical uncertainty due to finite sample size is statisti-
brand (according to the logistic availability function) and the rest cally expressed as confidence bands or confidence intervals (Fahrmeir
chooses the second best TCO option. et al., 2011). More precisely, one estimates the sales share plτ of vehicle
Finally, we combine all factors to the utility of the different vehicle type l (e.g. propulsion technology or vehicle size or a combination of
options. We calculate the utility for each user i for each propulsion tech- such distinctive characteristics) from the number of driving profiles klτ
nology τ and assume that each user buys the option that maximises his that fulfil the required condition (e.g. that should be EVs) and the
or her individual utility, i.e. number of all driving profiles in that group Kl as p ^lτ ¼ klτ =K l . Here, the
hat ^ indicates an estimate for the “real” market share plτ. Given a con-
max ð−TCOiτ þ WTPMiτ −limited choiceiτ Þ ð5Þ fidence level 0 b α b 1, the confidence band “contains the real value of plτ
τ
in (1 − α) 100% of all cases in which confidence intervals are estimated”
where the user's individual TCOiτ includes the cost for the home charg- (Fahrmeir et al., 2011). For a given confidence level α an upper value p+ lτ
 
ing option or base charging point for commercial vehicles, cf. Eq. (3). and a lower value p− lτ are calculated, such that p ^lτ ∈ p− þ
lτ ; plτ in (1 − α)
Calculating the utility maximal propulsion system for each user, sum- − 100% of the cases. In the present situation of market shares, one has
ming up all drivers for whom this would be an electric vehicle and di- to calculate a confidence interval for the success probability plτ of a bino-
 
viding it by the total number of driving profiles, we obtain the shares mial distribution Bðklτ jplτ ; K l Þ ¼ Kk l pklτlτ ð1−plτ ÞK l −klτ . The calculation of

pl of potential EV users in the sample.
confidence intervals via a Gaussian distribution is a common approxi-
mation for this case. However, it is not a good approximation here
2.3.3. Aggregation and Market Diffusion
since market shares of electric vehicles tend to be rather small, i.e.
The EV simulation and utility calculation above are performed for
klτ ≪ kl, and the Gaussian approximation tends to underestimate confi-
every driving profile. We distinguish three different user groups (pri-
dence intervals in that case (Brown et al., 2001). Using a conservative
vate, commercial fleet, company car), four vehicle sizes (small, medium,
approach, often referred to as “exact”, the upper and lower confidence
large and LDV—where LDV are purchased by commercial fleets only).
interval boundaries are given by (Brown et al., 2001)
We thus arrive at 3 · 3 + 1 = 10 groups l in addition to five propulsion
technologies (Gasoline, Diesel, BEV, PHEV and REEV). The share of
− −1
driving profiles in year t, plτ(t), that are assumed to buy a vehicle of plτ ¼ Beta ðα=2; klτ ; K l −klτ þ 1Þ
þ −1 ð7Þ
type l and propulsion technology τ according to their individual utility plτ ¼ Beta ð1−α=2; klτ þ 1; K l −klτ Þ:
is now multiplied with the number of vehicles nl in the corresponding
user group and vehicle size l = 1,…, 10. As parameters change over
Here, Beta− 1(x; a, b) denotes the inverse of the cumulative Beta
the years t we may calculate the registrations of technology τ as
distribution Beta(x; a, b) = (B(a, b))−1 ∫ x0ta − 1(1 − t)b − 1 d t with
Nlτ(t) = plτ (t) · nl. However, vehicles that were purchased in a given
the Beta function B((x, y)) = ∫ 10tx − 1(1 − t)y − 1 d t for normalisation.
year do not remain in stock forever. Instead vehicles will be scrapped
Additionally, the statistical uncertainty can easily be propagated to de-
with an age-dependent probability Pscrapping(t). This can also be written
rived quantities.5
with a survival probability L(t) = 1 − ∫ t0Pscrapping(t′)d t′ for a vehicle to
To summarise, the usage of individual driving profiles and individual
survive until age t. With this distribution at hand, one can write the
modelling of the purchase decision as proposed here, allows a direct
stock of EVs (i.e. technology τ) in vehicle group l and year t, Slτ(t), as
calculation of the statistical uncertainty due to finite sample size. This
the sum of EVs purchased in earlier years Nlτ(t′) that survived until
helps us to distinguish systematic from statistical errors and is not
year t:
feasible within aggregated market diffusion models.
X
t  0  0
Slτ ðt Þ ¼ Nlτ t L t−t : ð6Þ 3. Results
t 0 ¼t 0
The present section is devoted to a validation and first results of the
The survival probability L(t) has been obtained from the official proposed model using individual driving behaviour. The results will
German statistics (see Plötz et al., 2012 for details): We use data for focus on the special opportunities when using many driving profiles:
the complete German vehicle fleet and the age dependent scrapping a statistical analysis of future electric driving shares of PHEVs and an
probability over ten years. These probabilities have been calculated con- analysis of the statistical significance of the predicted market shares.
sidering the age structure of the German vehicle stock since 2001 by Results of our model on EV market diffusion and an assessment of mar-
computing the change between adjacent ages in subsequent years for ket diffusion policies are given in Gnann et al.
all years available. The Weibull distribution for the survivor function is
β
given by Lðt Þ ¼ e−ðt=t0 Þ where the parameters t0 = 14.7 for scale and 3.1. Simulated Electric Driving Shares
β = 3.5 for shape have been obtained from a least square fit. These
imply an average age for scrapping of 13.8 years and an average age of The electric driving share of a potential hybrid EV is a key factor for
the vehicles in stock of 7.3 years, both in good agreement with other its economics. Regular daily driving with almost complete utilisation
studies of the German passenger car stock (Plötz et al., 2013). This dis- of the vehicle's electric driving range strongly reduces the fuel con-
tribution will be used for the stock model of the German vehicle fleet. sumption costs. Thus, the regularity of driving influences the user's
Vehicles that were purchased in commercial sectors are transferred to
5
the private market without further modelling after the average com- Let us assume the interval to be symmetric around plτ and denote the half width of the

interval by Δplτ = p+lτ − plτ /2. The resulting uncertainty due to finite sample size of the de-
mercial vehicle holding time.
rived result is then calculated by error propagation. Let y = f(x1, …, xn) denote a function
The use of real world users with their individual driving profile al- of the input parameters xi being uncorrelated and each having variance (Δxi)2. The vari-
lows estimates of the statistical accuracy of the market share calcula- 2 2
ance of the resulting function is then given by ðΔ f Þ ¼ ∑ ð∂f =∂xi Þ ðΔxi Þ2 (Bevington,
i
tions. The market shares depend, of course, on the assumptions for the 1969). For example, let nl denote the total number of vehicle registrations in segment
decision making of the individual as well as the assumptions for fuel or user group l. Thus, the variance (ΔNτ)2 of the total number of technology τ regis-
trations N τ ¼ ∑l p ^lτ ðt ÞNlτ ðt Þ is obtained as (ΔN τ)2 = ∑ l(Δplτ)2N 2lτ. Similar results
and vehicle prices and vehicle configurations. However, the model pro- can be derived for the stock of EVs. Since Δplτ is a function of the confidence level
posed here allows for a direct calculation of the uncertainty from a finite α we obtain upper Nτ − ΔNτ and lower boundaries Nτ − ΔN τ, i.e. an α-dependent
sample size. Note that this is not possible when aggregated top-down confidence interval, for the registrations of EVs.
P. Plötz et al. / Ecological Economics 107 (2014) 411–421 417

100% private cars the users' driving patterns.7 In summary, Fig. 3 demonstrates that average
private car regression
driving behaviour and average electric driving shares are strongly mis-
Electric driving share PHEV

company car
80% company car regression leading (even when an average is formulated as a function of annual
commercial cars VKT) and supports our proposed market diffusion model with individual
commercial car regression
analytical approximation TCOs based on the individual driving profiles.
60% Since the electric driving share is an important parameter in the in-
dividual TCO calculation of PHEVs and REEVs, any estimate of it should
40% be as precise as possible and its precision should be known. In the pres-
ent section, we estimate the precision of electric driving shares when
obtained from simulating multi-day driving profiles as EVs. Directly re-
20% lated to this, a short observation period, e.g. single-day driving profiles,
can lead to overestimated of electric driving shares and the future mar-
0% ket shares of EVs (Gnann et al., 2012a,b). As described in Section 2.3, we
0 20.000 40.000 60.000 80.000 simulated driving profiles of commercial vehicles as PHEVs. These have
Annual VKT [km] an observation period of up to four weeks. We calculated the confidence
band width Δsi(T) as a function of observation days T for each user's
Fig. 3. Simulated PHEV electric driving shares as a function of annual VKT for medium-
electric driving share.8 The 25%- and 75%-quantile as well as the median
sized vehicles. Shown are the results of battery simulations of many individual cars
(symbols) and a kernel regression (solid lines): private (blue, N = 3561), company cars
(50%-quantile) of the confidence width distributions for different obser-
(green, N = 117) and commercial cars (red, N = 96). A simple approximation for the vation periods T are summarised in Table 3.
kernel regression given by s(r) = 240 · L/r (dashed black line) is also shown. The precision of the estimated median electric driving share
increases quickly with growing number of observational days for the
commercial vehicle fleet analysed here. However, the effect slows
down after about 10 days and mainly driving profiles that contain
trips on a small number of days only improve noteworthy in the electric
driving share precision after this period of time. But as the observation
time increases, the probability of larger errors decreases. We conclude
TCO in case of a plug-in hybrid EV. To validate the model proposed here,
that driving profiles should contain at least one week of driving.
we performed battery simulations as described in Section 2.3.1.
The present section's results highlight the importance of simulating
To understand the variation in daily driving patterns and to estimate
each individual driving profile instead of relying on assumed average
the range of possible yet realistic electric driving shares, all driving
electric driving shares. Furthermore, driving profiles over several days
profiles have been simulated as PHEVs. Here, we limit our analysis to
of observation time allow us to estimate the statistical accuracy of the
medium sized vehicles and assumed a battery capacity of 10 kWh
individual electric driving share and thus of the accuracy of this very
with a depth of discharge of 75% and an electricity consumption of
specific parameter in the TCO calculation.
0.22 kWh/km, resulting in an electric driving range of L = 34.1 km.
The simulated electric driving shares si (cf. Eq. (1) in Section 2.3.1) are
shown as a function of annual VKT in Fig. 3 for the three user groups 3.2. Significance of User Group Assignment
(private, commercial, and company car).
The electric driving shares in Fig. 3 vary strongly between different We distinguish four different user groups in different stages of the
users and with different annual VKTs. In addition to the simulated indi- adoption process: innovators, early adopters, early and late majority,
vidual electric driving shares, a non-parametric kernel regression is and laggards (Rogers, 1962) in order to assess each driving profile's
shown to highlight typical electric driving shares for varying annual individual WTPM in the proposed EV market diffusion model. It is im-
VKTs.6 Please note that all driving profiles have been simulated as portant to understand the validity of this assignment and the present
PHEVs irrespective of their individual TCO. That is, only very few of section aims at estimating its validity.
the driving profiles will actually be cost-effective as PHEVs and the In the original data set the assignment to one of the four adopter
first adopters of PHEVs are unlikely to cover the whole range of annual groups has been made by the respondents' answers to questions
VKTs (Plötz and Gnann, 2013; Plötz et al., Submitted for publication). Fur- concerning their ownership of an EV, their interest in EVs and their pur-
thermore, some electric shares can be exceptionally high (N 365 · L/r chase intention for an EV (Peters and Dütschke). These questions have
where L denotes the electric driving range and r the annual VKT) even
for large annual VKT since users can recharge up to several times a day 7
Here, the regularity of driving can be measured by the standard deviation of the loga-
if they return home between their trips. rithm of the daily VKT of an individual driver. For the drivers in Fig. 3 these logarithmic
The typical electric driving share is decreasing with increasing annual standard deviations in their daily driving range from 0.36 (10% quantile) to 1.49 (90%
VKT as expected. For the electric driving range L = 34.1 km (based on the quantile) with an average of 0.90. Furthermore, the availability of charging infrastructure
does not explain the variation of simulated electric driving shares since recharging at
technical assumptions made here) and annual VKT r, s(r) = 240 · L/r can
home (or at the company for commercial vehicles) has been simulated for all vehicles, in-
serve as a typical electric driving share s approximating the kernel regres- cluding the possibility of re-charging during day time if the vehicle returns home. Howev-
sion in Fig. 3 between 10,000 and 60,000 km annual VKT. That is, an aver- er, part of the variation of electric driving shares for fixed annual VKT could be explained
age user would have an electric driving share as if he was distributing his by the difference between the driving in the observed week and other weeks of the year.
We find the stated annual VKT to be smaller than 52 times the total VKT observed in the
driving equally among two out of three days a year (240 ≈ 2/3 · 365).
driving week for 60% of the driving profiles, i.e. more than half of the users driver more
However, even for fixed annual VKT the electric driving shares within a than their average in week observed. About 23% drive even more than twice their average
user group vary strongly indicating large differences in the regularity of number of weekly kilometres and about 11% drive less than half of their weekly driving.
8
We consider a user's simulated electric driving share as an average over several days T
T
of observation si ðT Þ ≡ ð1=T Þ∑ j¼1 si j with the electric driving share sij of user i on day
j = 1, …, T. We take this as an estimate for the “real” electric driving shares as obtained
from the finite sample of T observation days. Assuming the individual electric driving
pffiffiffiffi share distribution to be Gaussian, the width Δsi(T) around user i's average electric driving pffiffiffi
6
Shown is a Nadaraya–Watson kernel regression with Gaussian kernel over N nearest share si ðT Þ at confidence level α after T days is given by Δsi ðT Þ ¼ t ð1−α=2; T−1Þ σ i ðT Þ T .
neighbours (Fahrmeir et al., 2011) in which N is the number of driving profiles in a given Here, σi(T) denotes the standard deviation of user i after T days of observation
1=2
σ i ðT Þ ¼ ½ðT−1Þ−1 ∑n¼1 ðsi ðT Þ−sin Þ2 
T
user group (medium size vehicles; private N = 3561, commercial fleets N = 117, privately and t(x,n) is Student's t-distribution for n de-
used company car N = 96). grees of freedom (Fahrmeir et al., 2011).
418 P. Plötz et al. / Ecological Economics 107 (2014) 411–421

Table 3 However, it is responsible for about one third of the annual registrations
Statistics of 95%-confidence bands of simulated PHEV electric driving shares. of passenger cars in Germany and thus an important market. The pres-
Period T Quantile of Δsi ent section is intended as model validation and does not include EVs.
25% 50% 75%
Since EVs are in an early market phase, no historical data for large
scale EV market diffusion is available that could be used for validation.
5 days 4.7% 19.1% 33.2%
However, a model that is able to reproduce market shares of different
10 days 5.2% 12.3% 18.4%
15 days 6.4% 10.2% 14.6% historical propulsion technologies seems better suited to predict future
20 days 6.0% 9.6% 12.3% market shares than a model that does not reproduce these historical
market shares. We thus include this assessment of historical diesel mar-
ket shares as an additional validation of the model proposed here.
not been asked in the driving profile data and the assignment was made We study a large sample of German commercial passenger cars col-
according to the driving profile's sociodemographic variables (see lected in 2002 (IVS, 2002). For each vehicle in the database that has
Section 2.3). However, in the original data set where the adopter status been used on the day of the survey, the lengths of all daily trips are
is known, the same assignment according to sociodemographic vari- summed up and multiplied by the average number of working days in
ables can be performed and cross checked with the actual adopter status Germany (which is 220 days per year) to obtain an estimate for the ve-
as determined from the EV ownership, interest and purchase intention. hicles annual VKT. In this case, the latter was not part of the survey and
Thus we applied the procedure described in Section 2.3 to the original thus had to be calculated. For each vehicle, the TCO as gasoline and
survey data and obtained the respondents status as determined from diesel car was calculated and the vehicle has been assigned the fuel
the similarity with other adopters. This new and the original adopter type with a lower TCO. For the validation purpose, we studied only
status assignment are compared in Table 4. In the new assignment, 0 medium-sized vehicles and assumed a purchase price of 19,560 Euros
out of 5 innovators have been identified correctly, 3 out of 9 early for gasoline and 21,560 Euros for the diesel vehicle. The average fuel
adopters, 193 out of 455 from the early (and late) majority and 152 prices in 2002 have been taken from Plötz et al., 2012 and were
out of 472 laggards. In total, about 37% of the assignments are correct. 1.34 Euros/l for gasoline and 1.26 Euros/l for diesel fuel. The fuel con-
The assignment is accordingly slightly better than an assignment by sumption for the 2002 passenger car assumptions in German commer-
pure chance (with about 25% correct). The result is mainly determined cial fleets are 7.6 l/100 km for gasoline and 6 l/100 km for diesel fuel.
by the two large groups of users (early/late majority and laggards). Tak- Furthermore, average operation and maintenance costs amounted to
ing only the two dominating groups 193 + 152 = 345 out of 360 + 0.025 Euros/km for Gasoline and 0.023 Euros/km for Diesel fuel where-
251 = 611 users are assigned to their correct group, i.e. 57% ± 5.2% as insurance costs were 114 Euros/a for gasoline and 242 Euros/a for
(at 99% confidence level, i.e. α = 0.01) are correct and also better than diesel vehicles.
pure chance (50%). Focussing on these two large groups, Table 4 can be The share of diesel vehicles in the different commercial branches es-
reduced two the contingency table (193,162; 97,152). Performing a χ2- timated by the TCO model proposed here is shown in Fig. 4 together
test of dependence, we find the old and new assignment to be significant- with the actual market share as stated in the corresponding survey.
ly dependent (p-value b 0.01) as wished, both in the case of the reduced Fig. 4 shows that the estimated and actual market shares of commer-
as well as the full contingency table. cial diesel passenger cars in Germany are 40–60% in the major commer-
To summarise, the assignment of a driving profile to a position in the cial branches and 20–70% over all branches. In Fig. 4 the commercial
adoption process (and connected to this the WTPM) is significantly bet- sectors are sorted by sample size which roughly follows the registra-
ter than pure chance but not very accurate. It adds the important fact to tions of passenger cars in these segments. In most cases, the estimated
the model that some users are willing to pay a price premium for EVs market shares are very close to the actual market shares with significant
and assigns this WTPM to each driving profile individually. We addi- deviations in the sectors HJ (transport and telecommunications), A (ag-
tionally tested the effect of a purely random assignment of the WTPM riculture and forestry), and K (finance). Even if the share of diesel in a
to the driving profiles and found the resulting EV stock in 2020 to sector is well reproduced, one could still question whether the individ-
change by about 10%. We thus conclude that the assignment of a will- ual vehicle assignments are correct. In total, we found 54.2% of the indi-
ingness to pay more based on a user's socio-economic characteristic is vidual assignments to be correct with a lowest success rate of 38% in
meaningful and helpful for modelling the market diffusion of electric branch of industry K (finance) and the highest rate of 66% in branch B
vehicles. (mining). Thus we conclude that a TCO based model is in principle
able to reproduce the market shares of diesel passenger cars of German
3.3. Reproduction of Diesel Market Shares commercial vehicles. TCO is thus one important aspect of the purchase
decision and accordingly part of many market diffusion models for EVs.
As a proof of principle, we show that our TCO based approach for a An example for the calculated confidence bands is shown in Fig. 4 for
vehicle purchase is able to reproduce the current market shares of diesel the estimates of diesel market shares in German commercial sectors.
passenger cars in German commercial fleets. This supports our general Shown are the α = 0.1, 1, 5, 10, and 30% confidence bands (from light
proposal of including TCO as one important factor in the purchase blue to dark blue), i.e. the “true” value should lie within the confidence
decision for passenger cars. We acknowledge the fact that commercial band in 99.9, 99, 95, 90, and 70% of the cases where confidence bands
fleets are only one of the three user groups under consideration here. are estimated. As expected, the width of the confidence bands increases
with decreasing sample size (shown in parentheses in the abscissa). In
Table 4 most cases the observed market share is within or close to the range
Contingency table of original and newly assigned user group for validation of the of the confidence bands. Thus, the TCO calculation seems to capture im-
assignment. Note that the group sizes in the new assignment have been pre-determined
portant aspects of the purchase decision. Furthermore, the calculated
as described in Section 2.3 and Table 1.
confidence bands help us to distinguish purely statistical uncertainty
Original assignment New assignment from possible systematic inaccuracies.
Innov. Ea. ad. Majority Laggards Sum

Innovators 0 1 47 33 81 4. Discussion and Conclusions


Early adopters 3 3 118 125 249
Majority 2 3 193 162 360 We proposed a new approach to model market diffusion of EVs in a
Laggards 0 2 97 152 251 detailed, user specific and empirical way. The model decision for differ-
Sum 5 9 455 472 941
ent propulsion system is based on an individual total cost of ownership
P. Plötz et al. / Ecological Economics 107 (2014) 411–421 419

for private nor for commercial car purchases. Furthermore, private


buyers of hybrid and conventional vehicles seem to lack knowledge
necessary for a TCO-based decision (Turrentine and Kurani, 2007). An
analysis of the potential early adopters of EVs in Germany shows
that more criteria than only the vehicle's TCO are important (Peters
and Dütschke; Wietschel et al., 2012; Plötz et al., Submitted for
publication). Accordingly, our model covers further important aspects
of the purchase decision: (1) The need of frequent recharging was ad-
dressed in the model by adding the cost for a home charging option to
the vehicle's TCO; (2) the WTPM of some user groups has been derived
from surveys and is added to the driving profiles based on the vehicle
owner's socio-demographic characteristics; (3) the limited choice of
brands and models is included according to the current share of brands
offering EVs. Overall, we attempt to make the most important factors in
the EV buying decision explicit and measurable. They have been includ-
ed in our model in an empirical way that allows updates or corrections
when more data on WTPM or choice of models become available in the
Fig. 4. Diesel market shares within different branches of industry in Germany. Shown are the
actual values from a large-scale survey (solid line) and the estimate from a simple TCO calcu- future.
lation (dashed line) together with confidence bands (in blue) from the finite sample sizes Other factors known to influence the purchase decision such as the
(given in parentheses). See text for details of the calculation. availability of public charging infrastructure or social interaction are
not or only partially included. The presence of public charging infra-
structure can be included in the model by allowing recharging when
calculation extended by a willingness-to-pay-more for new and envi- the vehicle is parked in public spaces (this can be modelled by making
ronmental friendly vehicles of some vehicle buyers, limited choice of use of the purpose of trips, e.g. ‘shopping’ or ‘leisure’, contained in the
EV cars available on the market and the cost for charging reflecting driving profiles). The model includes the cost for a home-charging op-
the current lack of public charging infrastructure and the corresponding tion. This has to be a public charging point for users without garage
range anxiety. We now turn to a discussion of the EV market diffusion and is included in the model. Yet, it is not known whether the individual
model. The distinctive features of the present model are the individual user actually has access to a near-by public charging point. However,
utility maximisation based on a detailed analysis of many individual presently and in the near future charging-at-home will be the dominat-
driving profiles as well as in the inclusion of commercial vehicles and ing charging option since public charging infrastructure is hardly avail-
company cars. The user specific analysis allows us to cover a wide able and will remain expensive. Furthermore, users return home very
range of usage scenarios and to study specific user groups such as com- frequently and the cost for or availability of a home-charging should
mercial drivers or potential early adopters (Plötz and Gnann, 2013; be one of the most important factor in the EV purchase decision. The in-
Plötz et al., Submitted for publication). Furthermore, the large number clusion of social and neighbouring effects on market diffusion of EVs is
of driving profiles allows the modeller to use statistical methods to as- not part of the model. However, the actual extent of these effects is dif-
sess the statistical quality of the model results. Additionally, EV specific ficult to quantify and beyond the scope of the present paper.
purchase decision factors such as the limited electric range and the need The model quality has been tested by the forecast of market shares of
for a base charging spot are addressed by the model proposed here. diesel vehicles for commercial passenger cars. Compared to statistical
The driving data of private users in the model extends over one week data the diesel market shares calculated with the model show good
which might not contain rare long-distance trips that seem important agreement. The model evaluation has furthermore shown that a short
for EV adoption. We tested the robustness of our model by calculating observation period of one or two day could lead to strongly biassed es-
the number of days per year with more daily VKT than the BEV range timates of electric driving shares and therefore biassed results for EVs.
and including the cost for a substitute vehicle following the methodolo- The quality of results increases quickly with the number of observation
gy of Plötz (2014). We found no change in the model results and days. However, the effect slows down after about ten days.
conclude that one week of observation already captures important fluc- One of the main disadvantages of the model is the data require-
tuations in individual's daily driving. ments. For reliable estimates several hundred driving profiles per user
The individual EV simulation is probably more abstract or mathe- group (private, commercial, company car) are needed. These driving
matical than the actual purchase decision of private users. But it covers profiles should extend in time over at least one week and contain addi-
the important aspect of the regularity of an individual users' driving be- tional socio-demographic information on the car owner. Quite often,
haviour. Users are aware of EV's limited electric range and understand such data is unavailable and the collection of data and the connection
the general economics of low operating costs for electric driving. Simi- of the different data sources require real effort. However, driving data
larly, the TCO calculation of Eq. (2) is rather complex but the purchase with limited observation time is available for many industrialised coun-
and operation costs of a vehicle are an important aspect in the purchase tries and the interest in EVs has triggered driving data collections over
decision both for private (Peters and de Haan, 2006) and commercial long time spans (Karlsson and Kullingsjo, 2013; Smith et al., 2011b).
buyers (Anon.). This is indicated by the average annual VKT for diesel ve- Thus, more driving data is becoming available and can be used for
hicles (22,300 km) and gasoline vehicles (11,800 km) in Germany modelling in the future.
(Follmer et al., 2010) — reflecting the average fuel economy under the In summary, we developed and tested a user specific EV market
German conditions of both propulsion technologies. Accordingly, TCO cal- diffusion model to project future market shares of EVs and to evaluate
culations are a part of many EV market diffusion models (Holtermann policies stimulating EV market diffusion.
et al., 2011; Nationale Plattform Elektromobilitat (NPE), 2011b; Plötz
et al., 2012; Peters et al., 2012; Mock, 2010; McKinsey and Company,
2011). Along the same direction, recent studies pointed out that the Acknowledgements
costs of EVs are a major influence in the purchase decision (Götz et al.,
2011; Peters and Dütschke; Wietschel et al., 2012; Knie, 1999). The authors would like to thank Elisabeth Dütschke, Dirk Höhmann
Although the TCO are an important factor in the vehicle buying deci- and André Kühn. Funding from REM 2030 (regional ecological mobility)
sion, they alone cannot explain purchase decisions of car users, neither is gratefully acknowledged.
420 P. Plötz et al. / Ecological Economics 107 (2014) 411–421

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