The Determinants of U.S. Hybrid-Electric Vehicle Saturation Level and the Implications---Insight from the County-Level Registration Data

The hybrid electric vehicle (HEV), a $30 billion per annum industry, has long been treated as another commodity where only its price and fuel efficiency matter. In fact, its growth has deep socioeconomic roots, and auto manufacturers have long practiced concentrated and localized marketing when rolling out new models through their branches, dealers and wholesalers. However, no previous study has investigated this effect for HEVs down to the county level. This thesis analyzes anew and previously inaccessible data set to provide a detailed view of the saturation rate of HEVs for 3000 counties in the U.S. Utilizing the U.S. county-level registration data for HEVs, our results show that the dollars-per-mile cost is the most important factor for consumers purchasing HEVs. State tax waivers, state income tax credits and HOV lane access are shown to be important for promoting HEV sales. On the other hand, the HEV tax incentives from the Federal government are relatively ineffective without these additional incentives from state governments. These results suggest that the federal government should allow state governments to decide their own policies for promoting HEVs. Lastly, a Geographic Information System (GIS) analysis of the sales of Toyota Prius shows that they have a spatial clustering feature indicating that, contrary to popular opinion, state government incentives have a greater effect on consumers in the Midwest than they do in the East and West Coast.

Association for Public Policy Analysis & Management