Electric vehicles potential market

What is it about?

Forecasting the potential demand for electric vehicles is challenging. As most studies about new technologies rely on stated preference (SP) data, market share predictions will not reflect shares in the real market. Moreover, typical demand models are better suited to forecast demand in stable markets, showing limitations in the case of innovations. We discuss the problem of predicting market shares for this new product and propose a method that combines advanced choice models with a diffusion function to consider that new products often need time to gain a significant market share. We have the advantage of a relatively unique databank where respondents were submitted to the same stated choice experiment before and after experiencing with an electric vehicle. Results show that accounting for the diffusion effect, allows predicting the slow penetration of the initial years and a faster market share increase after diffusion takes place.

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