Analysis of effective factors and willingness to pay for alternative fuel vehicles in Tehran

Concerns for climate change, reduction of greenhouse gas emission and environmental pollution, besides economically dependency on fossil fuels and political aspect motivate governments and policy makers to take into account replacing usual vehicle with alternative fuel vehicles (AFVs) such as Compressed Natural Gas Vehicles (CNGV) and Gasoline-Electric Hybrid Vehicles (GEHV). The air pollution in Tehran is a serious concern that based on this problem, CNGV has been introduced to Iranian market from 10 years ago. On the other hand, with the approval and notification of the removal of the electric vehicle importation’s tariff law, GEHV has been entered into the market of Iran as a new entrant. The purposes of this paper is to identify the effective factors to choose AFVs for drivers in Tehran and the assessment of effects of the incentive policies that increase AFV shares and computing their willingness to pay (WTP) for AFV under different incentives. This study designed a questionnaire which includes 3 parts: current vehicle features, dominant travel characteristics, socio-economic properties and the prioritization of effective factors on new vehicle purchase, and the tendency of AFVs choice with different scenarios representing different features. A random sample of 365 respondents was interviewed in a face-to-face survey in February 2016 in the technical inspection centers and in compressed natural gas stations. Finally, for the determination of effective factors on current and new vehicle purchase with revealed preference information and the assessment of AFVs usage tendency with stated preference information, the Multinomial Logit models have been used and WTPs are calculated. The incentive policy in Tehran, like previous studied countries, was the most influential factor in motivating consumers to buy AFVs in comparison to improvement of AFV specifications. The results show that drivers’ WTP is 5 MT for free access to even-odd area for CNGV and 12 MT for GEHV, also WTP for free access to pricing area in Tehran central business district is equal to 10 MT for CNGV; i.e. people tend to pay this extra cost for AFVs to access to pricing areas. These values are comparable with similar studies in cities located in developed countries. However, the results of this study show that WTP for fuel cost in Iran is considerably less than WTP of people driving in developed countries. The fuel cost and access time to gas stations are influential variables on CNGV choice. The vehicle acceleration and driving range are influential variables on GEHV choice.