Analysis of factors for hybrid electric vehicle adoption using total cost of ownership

Abstract

The 30% of total GHG emissions are occurred in traffics, and 85% of them are taking place in the road traffics. Environmental Friendly Vehicle is a vehicle which affects the environment relatively less com-pared with existing Internal Combustion Engine Vehicle. The most commercially successful EFVs in South Korea are Hybrid Electric Vehicles. At the time of this writing, five types of gasoline engine-based HEVs are sold. This thesis analyzes the sales of YF SONATA HEV and K5 HEV, which account for 85% of do-mestic HEV market combined, against ICEV version of the same models from Total Cost of Ownership viewpoint. TCO is calculated to include the cost of purchase, maintenance, operation, and used car price. The relationship between the vehicle’s TCO and HEV sales share were analyzed by using linear regression anal-ysis. And we conducted the hierarchical multiple regressions analysis to analyze that the consumer’s percep-tion about the NPV which was used for analyzing each TCO for the HEV and the ICEV, and the relative ranking of factors which can affect the TCO for the HEV sales share. This research conducts a quantitative study on the necessary government incentives on HEV sales for the expansion of HEV market in Korea. We expect that our work could contribute to the design of government policy to promote environmentally friendly vehicles. Additionally, we hope that this work can serve to analyze the effect of such incentive policies on environmental conservation and social expenses reduction.