Does range or fiscal policies matter on EV adoption in Jakarta Metropolitan Area?

Abstract

Indonesian Government (GOI) is planning to implement electric vehicles (EVs) in its big cities, especially in the Jakarta Metropolitan Area (JMA). The GOI implemented fiscal policies (vehicle tax and other related taxes relaxations) to increase EV adoption. At the same time, it is also known that EV has an issue with the driving range. Range extender (RE) is one of the methods to increase the EV range. This study aims to test whether fiscal policies and implementation of RE and other factors are significant on EV adoption. At first, we conducted exploratory study to find out influential attributes for car purchase intention. After that, a stated choice experiment with three alternatives, battery electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV), and internal combustion engine (ICE), was carried out with respondents from JMA. In total, we obtained 472 valid responses for eight scenarios which resulted in 3,776 observations. We used a mixed multinomial logit model (MMNL) to show the trade-off among the applications of several hypothetical fiscal policies and RE on EV choice decisions. Additionally, with MMNL, we also calculated the willingness to pay and demand elasticities. We found that fiscal policy in the form of purchase price subsidy significantly influences the decision to choose BEV and PHEV. RE is also found to be significant for BEV and PHEV choice. It is a good sign for implementing fiscal policies on EV adoption. Finally, the results of this study would be beneficial as insight to EV adoption in Nusantara (New Capital City of Indonesia).

Keywords

• Electric vehicle adoption
• Exploratory study
• Stated choice experiment
• Fiscal policies
• Range
• Mixed multinomial logit