Costs of plug-in cars key to expand consumer acceptance

Posted By: Staff
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Washington, October 22 (ANI): A University of Michigan (U-M) survey has indicated that the costs of plug-in cars are key to expand consumer acceptance.

The survey shows that the cost of plug-in hybrid electric vehicles (PHEVs) is much more influential than environmental and other non-economic factors as a predictor of purchase probabilities.

The survey of a nationally representative sample of 2,513 adults age 18 and over was conducted between July and November 2008 as part of the Reuters/University of Michigan Surveys of Consumers.

"The data provide strong evidence that a combination of economic and social incentives may be most effective in successfully introducing these vehicles," said economist Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers, conducted by the U-M Institute for Social Research.

In addition to assessing the current state of knowledge and opinions about PHEVs, the survey addressed the willingness to pay for these vehicles given different cost and fuel savings scenarios.

Overall, when given no cost or fuel-saving estimates, 42 percent of those surveyed said there was at least some chance that they would buy a PHEV sometime in the future.

The researchers then asked respondents to rate the likelihood of purchasing a PHEV under three different cost-scenarios, each time assuming they would save 75 percent in fuel costs compared to a traditional, gasoline-powered vehicle.

With each successive doubling of the price of PHEVs, the probability of purchase fell by 16 percentage points.

On average, 46 percent of those surveyed said there was some chance they would purchase a PHEV that cost 2,500 dollars more than a traditional vehicle; 30 percent said there was a chance they would buy if the PHEV cost 5,000 dollars more; but just 14 percent said there was a chance if it cost an additional 10,000 dollars.

The relationship between cost and purchase probabilities was clearly indicated by the proportions who said there was zero chance of buying or 100 percent chance of buying at the three different cost premiums presented in the survey.

"Indeed, 56 percent of all consumers responded that there was no chance that they would buy a PHEV at the top premium," Curtin said.

"It should be no surprise that vehicle purchases, typically the second largest purchase households make, would be very sensitive to price," he added. (ANI)

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