Choices of Potential Car Buyers Regarding Alternative Fuel Vehicles in South Korea: A Discrete Choice Modeling Approach

Abstract

This study analyzes consumer preferences in South Korea for alternative fuel vehicles (AFVs), including battery electric vehicles (BEVs) and hydrogen fuel cell vehicles (HFCVs), instead of conventional fuel vehicles. A survey targeting 1500 potential car buyers in three years was conducted wherein the subjects stated their preferences depending on the varying conditions of AFV attributes and charger accessibility. Cluster-based multinomial logit and mixed logit models were developed to identify influential factors affecting consumer preferences. The models incorporated the sociodemographic characteristics of users, attitudinal perceptions, and vehicle attributes to capture their interactive impacts. The results of the estimated models suggest that a reduction in purchase price can substantially boost AFV sales, particularly those of HFCVs, with a direct elasticity of 1.78. Additionally, the models demonstrated that attitudinal perceptions, such as perceived environmental and economic benefits are significant factors. Moreover, potential car buyers who plan to buy one vehicle within one year showed the least preference for purchasing BEVs, indicating the importance of technology maturity in the BEV market. These findings can provide reasonable guidelines for establishing marketing strategies and stronger support to achieve the targeted market penetration of AFVs in a city or country.