Electric or petrol/diesel? Which car would you choose?

Given the climate crisis, shifting towards renewable energy has become an important focus of how to lower CO2 emissions. One way to accomplish this goal is to replace petrol or diesel powered cars with electric vehicles (EVs).

However, according to New Zealand’s Ministry of Transport, EVs made up just 2.1% of passenger vehicle registrations in 2019.

What makes people hesitant to purchase more environmentally friendly cars? What consumer preferences should manufacturers or governments focus on to increase the number of EVs on the road?

EVs vs petrol-diesel cars

To answer these questions, researchers used 1000minds conjoint analysis software to survey 90 randomly selected people in Dunedin, New Zealand. Survey participants were asked about their preferences with respect to the relative importance of these eight attributes associated with EVs relative to petrol/diesel vehicles:

1. Upfront purchasing cost – EVs are more expensive to buy than petrol/diesel cars, with an average difference of about US$19,000 in upfront costs.
2. Running cost – EVs are cheaper to maintain, and batteries can be recharged at home.
3. Greenhouse gas emissions – Less than 20% of electricity in New Zealand is generated using fossil fuels, causing EVs to contribute significantly less to greenhouse gas emissions than their fossil fuel counterparts.
4. Travel distance between refueling – Most EVs can travel smaller distances before needing to be recharged again.
5. Time required to refuel/recharge – EVs take 30-60 minutes to recharge at a public fast-charge station, compared to the instant refueling of petrol/diesel cars.
6. Maintenance cost – EVs have simpler driver systems, and therefore require less maintenance.
7. Confidence that the vehicle works as advertised – Because EVs haven’t been around for very long, potential customers may be uncertain about their reliability.
8. Cost of a one-off major repair – The cost of EV battery replacements could be problematic.

Relative to other methods for conducting conjoint analysis which produce aggregated data only, an important advantage of 1000minds is that data about the relative importance of the above-mentioned attributes are generated for each individual participant.

These individual-level data enable ‘cluster analysis’ to be undertaken to identify groups (‘clusters’) of people with similar preferences about what matters when choosing an EV. Identifying these groups is useful for being able to think about how to influence people’s behavior with the objective of increasing the uptake of EVs.

What do potential car-buyers want?

From the cluster analysis, the largest group identified was Cluster 4, comprising 40% of participants. The people in this cluster were most concerned that the EV would work as advertised.

This finding could be a positive thing for the future of EVs: as use of EVs increases, so will the proof of their reliability, which could encourage more consumers to take the leap. Furthermore, this group did not consider the purchase price to be very important when thinking about buying a new car.

The second largest group, Cluster 2, comprised 23% of participants. For them, the time needed to recharge the EV is most important, whereas CO2 emissions are least important. For this group, it seems unlikely they will adopt EVs unless the technology improves to decrease recharging times.

Only the smallest cluster, Cluster 3 (17% of participants), had preferences that were well aligned with the attributes of EVs. Also, Cluster 1 (20% of participants) was very put off by purchasing price and maintenance fees.

Implications for the near future

It seems that with technological advances, it can be expected that increasing numbers of people will switch to EVs . In the meantime, New Zealand could try to implement more policies to encourage EV uptake – for example, as other countries have done, by subsidizing EVs, parking fees, and giving EVs access to special lanes in cities.

Further reading

W Ogden & P Thorsnes, “Electric or petrol/diesel? Which car would you choose?”, EcoNZ@Otago, 42, 1-4. 

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