victorian electric vehicle trial mid-term report - Department of Transport

• Consumer preferences –operating costs are only oneconsideration made by consumersin the vehicle purchase decisionalongside other factors such assafety, quality, purchase price andreliability; the relative importanceof each factor varies over time (forexample, fuel economy becomesmore important when fuel pricessuddenly increase), and may notbe ‘economically rational’ (such asthe decision to purchase a vehiclewith high fuel consumption whenfuel prices show a short-termdip despite the long-term trendupwards); the availability of publiccharging infrastructure has beenidentified as a key influence onconsumer preference towardselectric vehicles.The variations seen in the economicmodelling can be mostly explainedby the differences in how these keyvariables are forecast to unfold andinteract with each other.According to the Department’s model,if both technology and oil pricesfollow forecasts, the take-off point forEV technology mainstream marketadoption is 2020. With referenceto Section 4.1.1, vehicle prices aredecreasing slightly ahead of forecasts,whereas oil prices are slightly aboveprojections (EIA 2012). This suggeststhat the breakeven year for EVs may beslightly earlier than 2020.Consumer preferences manifestthemselves differently before andafter this take-off point. Before thetake-off point, the early market isdriven primarily by ‘early adopters’ asoutlined in Section 3.2 who purchasethe vehicles for mostly non-financialreasons. This behaviour may bethought of as ‘economically irrational’,and by extension not well suited toeconomic modelling. As a result, EVsales predictions differ wildly up totheir predicted take-off point.Once the take-off point has beenreached, the market is effectively‘mainstream’ and more likely tobehave in ‘economically rational’ways. Once this occurs the economicforecasting becomes more reliable,even if consumers may still pursuepurchase preferences which are noteconomically rational.A consideration made in the economicmodelling commissioned by theDepartment relates to Australianmarket vehicle supply constraints(AECOM 2011). As was outlined inSections 4.1.3 and 4.1.5, supply ofvehicles into the Australian marketdoes not match that for marketselsewhere. For electric vehicletechnologies this is envisaged to bean issue until around 2020, which hassignificant implications for the salesvolume forecasts prior to this time.A range of factors may influence localsupply constraints. Poor sales and/or a perceived lack of support mayreduce OEM interest in the Australianmarket, thereby extending the supplyconstraints. Conversely, burgeoningconsumer interest and/or support forlocal manufacture may reduce supplyconstraints. These influences arerelevant to considerations relating tooptimisation of the economic benefitsto the state made in Section 6.1.3.A relatively constant influence onconsumer preference is the availabilityof public charging infrastructure.Charging infrastructure availabilitywill not affect the timing of the takeoffpoint for mainstream EV adoption,however it will strongly affect thevehicle sales either side of this date.This is discussed further in Section6.1.3 below.