TVA Electric Vehicle Survey

TVA Electric Vehicle Survey Consumer Expectations for Electric Vehicles October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles BACKGROUND Plug-in Electric Vehicles (PEV) are becoming increasingly available in the U.S. Two manufacturers (GM and Nissan) offer vehicles that are being advertised and promoted, heavily in some areas. The PEV is advancing rapidly from a concept or hypothetical travel mode to a viable option for new car buyers. The result is that consumers will take over the driver s seat when it comes to adoption of PEVs and how they are used. For that reason, EPRI has initiated research into how consumers perceive PEVs as an alternative to conventional gasoline powered vehicles. A PEV-based transportation economy alters the structure and operation of electric utilities such that they can play a pivotal role in the transformation process and become a key element in the provision of passenger vehicle services. Defining the character of a revamped electricity sector and the resulting challenges requires a full understanding of consumers wants, needs, and expectations for the role utilities play in providing transportation services to households. Cumulative Adoptions Figure 1 Characterizing PEV Potential Adoption Cumulative Adoptions Adoption rate peaks Initially, few adoptions occur Market Potential Adoptions level off Time High Gas Prices Infrastructure Investment How does EPRI propose to see and portray the PEV world from the driver s seat, and what will it do with the data and insights gained? EPRI is implementing surveys to elicit consumer perceptions, expectations, and intentions about PEVs. EPRI worked with its Electric Transportation Program Members to develop a survey instrument that addresses key PEV readiness issues such as: charging location and pricing preferences, vehicle cost, and social influences. The survey also collects demographic data to construct associations between these factors and consumer characteristics. Figure 2 Potential Influences on PEV Adoption Base Case Subsidy Removed Time The survey was first implemented in 2009 by EPRI and Southern California Edison. The results informed survey refinements that were implemented in other areas and markets. One of the markets surveyed in the summer of 2010 was the Tennessee Valley Authority (TVA) and its local power distributors. The results of that administration and analysis of the survey data are summarized herein. EPRI is using the data to help TVA and its local power distributors better understand how consumers perceive the PEV ownership experience, begin developing preliminary forecasts of PEV adoption (Figure 1), evaluate the effect of alternative influences on PEV adoption (Figure 2), and identify the corresponding infrastructure and charging needs. EPRI, TVA and TVA s local power distributors believe that the survey findings will be useful to others that have a stake in the rate and character of PEV adoption and offer the research synthesis that follows in the spirit of collaboration. Table of Contents Background...2 Key Findings...3 What s Inside...4 What and When Valley Residents Drive, and How Far...5 Electric Vehicle Survey Background and Methods...7 The Influence of Personal Characteristics on Initial Purchase Intentions...15 This report was prepared by Bernard Neenan, Electic Power Research Institute (EPRI) and Jason Kinnell, Veritas Economics. Photos courtesy of Tennessee Valley Authority (TVA). TVA Electric Vehicle Survey 2 October 2011

KEY FINDINGS Analysis of the survey responses from approximately 1,000 consumers served by Tennessee Valley (Valley) Distributors provides insight into consumers perceptions of Plug-in Electric Vehicles (PEVs) and the driving experience. Some of the key findings are as follows: Respondents indicated they are aware of electric vehicles: approximately 75% knew of battery electric vehicles (BEV) and slightly more were aware of plug-in hybrid electric vehicles (PHEV). A majority correctly thinks that PEVs are more costly than conventional vehicles and that they emit lower levels of carbon dioxide. However, there are indications that some respondents have concerns about the safety and reliability of PEVs, their range, and their maintenance costs. Charging preferences Faster charging methods are important factors in determining purchase likelihood. However, the expressed willingness to pay for the services such as faster at-home charging, public charging at work and other frequented places, and high-speed public charging stations is well below what is likely to be the cost of those services today. A large percentage expect their utility to develop public charging (59%) and offer at-home charging installation services (52%). A substantial proportion sees that role extended to providing information to potential buyers about PEVs and offering PEV readiness audits. Respondents indicating that they are likely to purchase a PEV tend to: Plan on buying a new vehicle in 12 to 36 months. Plan on buying a subcompact, sedan, or crossover SUV as their next new vehicle. Believe that PEVs are as safe and reliable as gasoline vehicles and do not express concern about the range of PEVs. Identify themselves as early adopters of new technology or part of the early majority of adopters. Gasoline or Diesel 71% A majority (62%) of respondents said they prefer an unrestricted, fixed price charging plan over plans that offer discounts of up to 30% for elective or restricted night-time charging. Over three-quarters of survey respondents indicated that they plan to purchase or lease a new vehicle before the end of 2013, which corresponds to about 20% of all households in the Valley. When asked if they would purchase a PEV if it was available in the make and model of their preference (the conventional vehicle they otherwise would buy), 14% indicated they would (Figure 3), almost the same percentage of respondents who said they would purchase a hybrid vehicle. But, only about 3% indicated that they were willing to make a PEV purchase given the premium prices attached to PEVs available today. Consumers see their electricity utility playing an important role in PEV purchases and operation decisions. Battery-Only 5% Plug-In Hybrid 9% Plug-In Electric Vehicles Hybrid-Electric 15% Figure 3 Engine Type of Next New Vehicle. Values derived from respondents purchase likelihood scores after reviewing vehicle information. Plug-in Electric Vehicles (PEV) are available in two types: Battery Electric Vehicles (BEV) and Plug-in Hybrid Electric Vehicles (PHEV). Battery Electric Vehicles operate solely on electric power provided to the drive from the battery, which is rechargeable. Plug-in Hybrid Electric Vehicles can operate on both a rechargeable battery and gasoline, providing an extended driving range. Consumer Expectations for Electric Vehicles 3 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles Charging Station at EPRI. Photo courtesy of TVA. WHAT S INSIDE Respondents indicating that they are likely to purchase a PEV also tend to: Have knowledge of PEVs through internet research, visiting or talking with dealers, requesting a brochure, or contact with PEV owners. Be male, young, or live in Nashville, Knoxville, Chattanooga, or Memphis. Park in the driveway and have an outlet within 25 feet. Be influenced by the information about PEVs provided in the survey. The material that follows provides a more detailed description of the survey and the insights it yielded. The survey process, instrument description, and results summary that follow are organized topically to highlight key findings: What and when valley residents drive, and how far. Electric vehicle survey background and methods. Information about electric vehicles. Influences of charging preferences and willingness to pay. Vehicle purchase intentions. Influence of personal characteristics on initial purchase intentions. Increased likelihood of electric vehicle purchase after reviewing vehicle information. TVA Electric Vehicle Survey 4 October 2011

WHAT AND WHEN VALLEY RESIDENTS DRIVE, AND HOW FAR Daily Commute. Reported weekday commuting (to and from work) is highly skewed: 84% said that their commute is less than 30 miles, and the average is about 17 miles per day (Figure 4). Valley commuters travel about the same as other Americans. The national average commute is about 14 miles per day. Plug-in hybrid electric vehicles, which purportedly can power the vehicle 40 miles on a fully charged battery, have enough electric power to fulfill Valley drivers everyday commutes. Three-quarters of commuters can go at least two days driving on the battery s electricity without a charge, or would only need a half-charge, or less, each evening. Almost half would need to charge only every 3-4 days, or could recharge each night in a few hours. Driving Patterns. Miles driven is more than 1.5 times higher on weekdays than weekends (Figure 5). However, the distribution over highway speeds is about the same. More charging time may be required on weekday nights than Saturday and Sunday nights. Extended Trips. Two-thirds of Valley residents report that they take at least one extended trip per year, and some take several (Figure 6). Traveling long distances from home makes the availability of public charging more important. Vehicle Types. There are over six million passenger vehicles in the Valley. Today s fleet is comprised primarily of full-size or compact sedans (over a third), and SUVs and pickups (together a third) (Figure 7). The average household has two vehicles. By comparison, a similar survey in Southern California found that 53% of vehicles were sedans and 8% were pickups. Less than 9 miles 9 19 miles 24% 51% Weekday Driving Average Mileage 49.0 Weekend Day Driving Average Mileage 32.7 20 29 miles 8% 39% 43% 30 39 miles 6% 40 49 miles 3% 50 59 miles 2% 60 69 miles 2% 70 79 miles 1% 80 89 miles 90 99 miles 1% 0% 61% 57% 100 miles or more 2% Miles at speeds more than 50 MPH Miles at speeds less than 50 MPH Figure 4 Typical Weekday Valley Commute, Round Trip Figure 5 Valley Driving Patterns Work Commute and Other Travel Full-size or Compact Sedan 33% 0 trips 1 5 trips 6 10 trips 11 20 trips 21 + trips 2% 3% 7% 27% 60% Pick-up Truck Crossover SUV or Small SUV Subcompact Sedan Large SUV Minivan Sports Car 14% 11% 8% 7% 5% 21% Other 1% Figure 6 Number of Yearly Trips More than 250 Miles One-Way Figure 7 Vehicle Types Consumer Expectations for Electric Vehicles 5 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles Next Vehicle. Based on survey respondents stated intentions, the vehicle fleet composition will change. The combined 10 percentagepoint decline in subcompact sedans, pick-up trucks, and minivans will be offset by the increase in Crossover or small SUVs. Smaller SUVs available as an electric vehicle may find immediate acceptance. However, the diversity of the fleet suggests that to satiate buyers model preferences, PEVs must be available in a variety of models to make substantial inroads into new vehicle sales in the near-term (Figure 8). Full-size or Compact Sedan Crossover SUV or Small SUV 22% 33% Perceptions of PEVs. Valley survey respondents indicated that they think PEVs are more expensive and would be available in limited makes and models. They are right on both counts, at least today and in the near future. This might account to some extent for the relatively low intention to purchase findings (see page 14). On the other hand, respondents seem to have fewer concerns about reliability, excessive maintenance costs, or safety, and they recognize that PEVs have lower emissions. Consumers are therefore likely to consider a number of factors when evaluating a PEV purchase (Figure 9). Understanding the relative effect of these perceptions on purchase intentions is a cornerstone research need. Pick-up Truck 15% Subcompact Sedan Large SUV Minivan Sports Car Other 9% 8% 5% 5% 2% Figure 8 Body Style of Next New Vehicle Valley Consumer Intentions Legend Strongly Agree Agree Neutral Disagree Strongly Disagree Cost of an PEV is higher than similar gasoline models PEVs are not likely to be in preferred model PEVs cannot go beyond 50 miles without need to refuel/charge PEVs are less reliable than similar gasoline models PEVs cost less to operate and maintain than similar gasoline models PEVs tend to be less safe than similar gasoline models PEVs emit as much CO 2 as similar gasoline models 0% 10% 20% 30% 40% 50% Percent of Respondents 60% 70% 80% 90% 100% Figure 9 Initial Perceptions of PEVs by Valley Households TVA Electric Vehicle Survey 6 October 2011

ELECTRIC VEHICLE SURVEY BACKGROUND AND METHODS The survey topics (Table 1) were selected because they address important research initiatives that need direction from consumers perspectives in order to contribute to fostering PEV adoption and efficient utilization. Respondents completed a 20 minute internet survey about electric vehicles. Questions ranged from respondents purchase intentions to the effect of information and social influences. Figure 10 provides an example quetion. Table 1 Survey Components Screener Determine eligibility (Must plan to purchase in next 5 yrs) Assess vehicle knowledge Purchase Intentions Perceptions of electric vehicles Purchase likelihood (before and after vehicle information) Driving Behavior Characterization of current fleet and driving habits Charging Preferences At home capabilities Public charging: locations, ownership, and time (3 hours vs. 30 minutes) Willingness to pay for alternative charging options Information and Social Influences Source and influence of information New technology adoption behaviors Expectations of the utility Demographics Personal characteristics Figure 10 Example of Preferred Charging Location Question Consumer Expectations for Electric Vehicles 7 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles The survey was designed to produce results representative of households served by TVA and its local distributors in the Valley, which is comprised of Tennessee and parts of Kentucky, Alabama, Georgia, Mississippi, North Carolina, and Virginia (Figure 11). Responses were solicited across the entire Valley, but with emphasis on the larger municipalities. Responses were solicited from a web-based panel. Panels facilitate completing surveys quickly and can focus on specific geographic areas. However, they may under-represent households with elderly or low-income inhabitants. group participants used range anxiety to justify a strong preference for a battery electric vehicle over plug-in hybrid electric vehicles. Range anxiety is the fear of being stranded when the battery runs out. While the concern is justified, the association with vehicle types was reversed. Others dismissed PEVs altogether because they associated them with very small and possibly unsafe cars, possibly because many of the recently available and highly publicized PEVs are subcompacts meant for in-city driving and limited cargo use. Electric Vehicle Survey Highlights Figure 11 Valley Survey Coverage Internet-based survey administered to 1,027 residential electricity customers within the TVA service territory. Example of Willingness to Pay Question Sample covered entire TVA service area, with oversampling in Knoxville, Nashville, and Chattanooga. An important research issue is understanding the difference between what consumers say they want (stated preference) and what they will actually pay for (revealed preference). Willingness to pay (WTP) questions elicit from survey respondents an indication of how much extra they will pay to have additional features or more of a specific feature. Figure 12 provides an example of one of the survey s WTP questions. As the figure shows, the respondent slides the indicator along the horizontal line to indicate how much she would pay to charge at work. The indicated amount is $.40/kWh, which is equivalent to $3.00/gallon for gasoline. This is a premium of $.30/kWh over what she would pay to charge at home ($.10/kWh). Survey included a variety of question types, including drop-down menus, multiple choice, and sliding scales. To qualify for the survey, respondents had to: Be at least 18 years old Plan to buy or lease their next new vehicle in the next 5 years Be the household s decision-makers concerning vehicle purchase The survey had six major components as indicated in the Survey Components summary (Table 1, previous page). Information About Electric Vehicles In designing the survey instrument, EPRI discovered in focus groups that consumers readily offered opinions and preferences regarding different types of electric vehicles, but they often associated and attributed features to vehicle types incorrectly. For example, focus TVA Electric Vehicle Survey 8 October 2011

Misconceptions are a product of the fact that PEVs in 2010 were a concept, not something consumers had familiarity with, either directly or through friends and associates. EPRI recognized that eliciting preferences and opinions about PEVs through a widely administered survey would require providing the respondent with a concrete portrayal of PEVs and their features by distinguishing them from conventional internal combustion engine (ICE) vehicles. The survey would also have to present important differences among electric vehicles (i.e., battery only versus plug-in hybrids). Descriptive material was included in the survey so that respondents started from the same base level of knowledge and understanding (Figure 13, next page). To test if the education materials influenced purchase intentions, respondents were asked to indicate which type of vehicle they would likely purchase at the start of the survey, and again after they had been exposed to the education materials. The adjacent side bar summarizes the education material and its effect on the results. To provide insight into differences in preferences and expectations associated with plug-in hybrid versus battery-only electric vehicles, half the respondents were asked questions regarding charging and driving decisions from the perspective of owning a plug-in hybrid electric vehicle, and the other half from that of owning a batteryonly electric vehicle. Impact of Knowledge on Purchase Interest The survey informed respondents about: How PEVs work (i.e., gas and electricity vs. electricity only) How far PEVs can be driven on a full charge How to charge PEVs The amount of time it takes to charge PEVs using different equipment After reviewing the vehicle information, respondents were again asked to allocate purchase likelihood points across the vehicle types. Respondents were able to increase, decrease, or not change the purchase likelihood for each vehicle type. After reviewing the vehicle information, PEVs average purchase likelihood increased by 5 points. Almost half of respondents allocated at least one purchase likelihood point to PEVs after receiving the vehicle information compared to one-third of respondents before vehicle information was presented. Vehicle Type Descriptions Plug-In Hybrid Electric Electrical System Requirements If a 3-hour full charge is available where you work, how much would you be willing to pay to charge at work? Assume that your current home electricity rate is $0.10 per kwh, which is equal to roughly paying $0.75 per gallon for gasoline on a per-mile basis. Please click on the scale below and drag the red marker to the price that represents how much you would be willing to pay to charge at work. $0.10 $1.00 $0.40 per kwh ($3.00 per gallon) I would not be willing to pay at a price within this range to charge at work. PROGRESS Figure 12 Example of Willingness to Pay Question Consumer Expectations for Electric Vehicles 9 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles Figure 13 Educational Overview Examples of Electric Vehicles Here are examples of each electric vehicle type. A wide range of makes and styles are expected to be available in a few years. Plug-In Hybrid Electric Chevrolet Volt Available Spring 2011 Hybrid Electric Vehicle Toyota Prius Since 2006 Battery-Only Electric Nissan Leaf Available Spring 2011 TVA Electric Vehicle Survey 10 October 2011

Vehicle Information Charging The education materials included a description of how PEV batteries can be charged at home (this excludes production hybrid electric vehicles whose batteries are only charged from energy recovered from driving). The description corresponds to standards that have been established: Level 1 (110 volt AC) and Level 2 (220 volt AC). Charging Electric Vehicles, How Far and How Fast The distinction between how fast the battery is charged at home becomes pertinent when respondents are asked to attribute relative value to faster charging. The third charging possibility, described in Table 2 is at commercial charging stations, which correspond to Level 3 DC charging. They provide another opportunity to characterize charging convenience and cost tradeoffs over the range of what drivers may encounter. Table 2 PEV Charging Time Plug-In Electric Hybrid Battery Electric Vehicle Miles on a full battery charge 20 40 70 110 How to Charge Electric Vehicles To charge the vehicle s battery, you will be able to plug it into a standard (110 volt) outlet, like you have at home. The plug and cord are stored within the vehicle itself. Some models may give you the option to use a special 220 volt charging station installed at your home, which allows you to charge your vehicle 3 times as fast as a standard (110 volt) outlet. The 220 volt charger uses the same voltage and about the same power as an electric clothes dryer. Charging service equipment Standard electrical outlet (110 volt) Time for a full charge 8 hours 24 hours Upgrade to 220 volt outlet 3 hours 8 hours Commercial fast charging station (high voltage) 30 minutes 30 minutes Influence of Charging Preferences and Willingness to Pay The timing of when PEV owners decide to charge their vehicles will have a substantial impact on the cost of supplying them electricity and hence the value owners realize from driving an electric-powered vehicle, rather than a gasoline or diesel-powered vehicle. In addition, coincident charging by many households in the same neighborhood may stress the local delivery system, possibly necessitating costly upgrades of equipment. Respondents were provided with descriptions of three at-home charging plans and asked to select their preferred charging plan. These plans are shown in Table 3 (next page). Commerical charging stations, like conveniently located gas stations, will offer much faster charging but at a higher price. Consumer Expectations for Electric Vehicles 11 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles Table 3 PEV Fuel Expenditure Savings Under Alternative Charging Plans Plan A Plan B Plan C Plan Description Anytime Time of Use Night-Time Only Charging Provisions 24/7 charging at a fixed and uniform rate ($/kwh) Discount for charging from 9:00 p.m. to 8:00 a.m. Charging only from 9:00 p.m. to 8:00 a.m. Plug-in Hybrid Electric Vehicle Savings ($/Year) $1,000 $1,200 $1,300 Battery Only Electric Vehicle Savings ($/Year) $1,500 $1,700 $1,800 The three charging plans involved tradeoffs in terms of convenience and cost. Savings are associated with restricting some or all charging to the evening hours (listed for each Plan in Table 3). Plan costs were derived to be generally representative of retail electricity prices and supply costs (for hypothetical evening rates) in the Valley. The plan costs also assumed that the individual would drive an average of 12,000 miles per year with gasoline at $3.00 per gallon and mileage of 20 MPG for an ICE vehicle. Charging plan preferences are displayed on the next page. The majority of the respondents (62%) prefer the Anytime charging plan (Plan A). Willingness to Pay for 220V Home Charging Station Survey respondents were asked to indicate how much they would be willing to pay to install a 220 volt charging station at their home. The home charging stations were portrayed as reducing the time for a full charge (from a nearly depleted battery) by about one-third: from 8 to 3 hours for a plug-in hybrid electric vehicle and from 24 to 8 hours for a battery-only electric vehicle. The graphic in Figure 14 plots the response, with the WTP (one-time installation cost) amount on the vertical axis and the cumulative percentage of respondents on the horizontal axis. Each point on the graph corresponds to a specific WTP and indicates the percentage of respondents who would be willing to pay that amount. The structure of the WTP graph in Figure 14 suggests that as a whole, consumers are not ready to pay a substantial amount for faster charging. Only 40% will pay $500 or more. In today s market circumstances, installing a 220V charging station can cost as little as $500, but the early experience is that the cost for a single-family home is more likely to be $1,500 to $2,500. Installation at an apartment building with outdoor parking may be substantially higher. $2,000 $1,500 $1,000 $500 $0 Less than 10% are willing to pay at least $1,000 to install a 220V upgrade system in their home for charging PEVs. Over half of respondents (60%) are not willing to pay $500 to install a 220V upgrade system in their home for charging PEVs. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Figure 14 How Much are Respondents Willing to Pay for the Home Installation of a 220V Upgrade? The divergence of the perceived value and actual cost may foretell unfulfilled expectations by early adopters. Some may decline the faster charging only to discover that they in fact need that capability to realize the full benefits of PEV ownership. WTP for faster at-home charging will depend on the availability and cost of at-work and other public charging facilities and commercial fast charging stations. TVA Electric Vehicle Survey 12 October 2011

When do Valley Customers Prefer to Charge at Home? Summary Results. Charging Plan A Anytime Charging Plan B Time of Use Charging Plan C Night-Time Only 20% 18% 62% More than half of respondents (62%) chose the plan which allows them to charge at any time at a fixed and uniform rate. Respondents chose their preferred at-home charging plans from one of three charging plans varying in cost based on when PEVs are charged (Table 3). The plans ranged from being able to charge anytime to only being able to charge at night. The more restrictions on when customers are allowed to charge, the greater the annual savings. Respondents indicated how willing they are to pay for an installation of a 220V upgrade at home for faster charging. Over half of respondents would choose to charge anytime at a fixed rate; however, they are not willing to pay for the installation of a 220V upgrade system in their home for charging PEVs. Less than 10% of respondents are willing to pay $1,000 to install the 220V upgrade (Figure 14). Willingness to pay for the installation is mostly influenced by expectations of public charging infrastructure and demographics (Figure 15). Statistical Model Used to Quantify Willingness to Pay for a 220V Home Charging Station Survey responses were further analyzed by constructing a model to quantify the relative impact of a number of influences and factors on the WTP for 220V charging. The largest influence is the respondent s expectation regarding public charging infrastructure (36%). Those that indicated that they expect utilities to play a key role in assuring an abundance of charging choices expressed a lower WTP, while those that see a limited role for utilities indicate higher WTPs (Figure 15). Demographics, social influences on vehicle purchases, and PEV research and knowledge are also important characteristics for predicting how likely someone is to be willing to pay more for at-home charging. For example, individuals with higher education levels indicate that they are willing to pay higher amounts for at-home charging than those with lower education levels. In addition, the individuals who are male, young, or have higher incomes tend to be willing to pay higher amounts for at-home charging. Expectations and influences of public charging infrastructure 36% PEV research and knowledge 8% Driving behavior and parking characteristics 7% Early adoption 5% Demographics 24% Social influences on vehicle purchase 11% Contacted public official about environmental issue 3% Concerns about safety, reliability, and range of PEVs 5% Figure 15 Summary of Statistical Model Results Numerous Factors Influence How Much Customers are Willing to Pay for the Home Installation of a 220V Upgrade Over half of respondents believe it is important for their utility to develop public charging infrastructure. Consumer Expectations for Electric Vehicles 13 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles Vehicle Purchase Intentions Initial purchase intentions were constructed by averaging each responent s scores to four vehicle choices: gasoline or diesel, hybridelectric, plug-in hybrid electric, and battery-only electric. Figure 16 summarizes the results. The results (average purchase likelihood in Figure 16) indicate that three-quarters are likely to buy an internal combustion engine vehicle in the next five years. The rest indicate the intention to buy a hybrid (15%) or an electric vehicle (9%). The survey was designed to test the impact of education and understanding about how PEVs operate and what it costs to own and operate a PEV on stated purchase intentions. At the beginning of the survey, respondents were asked to indicate their purchase likelihood for four vehicle types by allocating 100 points across the four types. The same purchase intentions questions were asked at the end of the survey. 80 76 Average Purchase Likelihood 60 40 20 15 9 Measuring Vehicle Purchase Intentions Respondents were asked to indicate their purchase likelihood for four vehicle types: 0 Gasoline or Diesel Hybrid-Electric Electric Vehicles* Gasoline or diesel * Electric vehicles combine the purchase likelihoods of Plug-In Hybrid Electric vehicles and Battery-Only Electric vehicles. Figure 16 Purchase Likelihood by Vehicle Type Beofre Reviewing Vehicle Information Hybrid-electric Plug-in Hybrid electric Battery-only electric The vehicle types were randomly listed for each respondent. Respondents could allocate all 100 points to one vehicle or any combination of vehicles. Results provide a relative indicator of purchase intentions. TVA Electric Vehicle Survey 14 October 2011

THE INFLUENCE OF PERSONAL CHARACTERISTICS ON INITIAL PURCHASE INTENTIONS Respondents purchase intentions were analyzed by constructing a model to quantify the impact of a number of factors on how likely they are to purchase a PEV. Figure 17 summarizes the relative impact of each of these factors. As the figure shows, PEV research and knowledge (19%) has the largest influence followed by demographics (17%). Demographics 17% PEV research and knowledge 19% Concerns about safety, reliability, and range of PEVs 5% Vehicle purchase characteristics 15% Residental characteristics 14% Each of the factors presented in Figure 17 is comprised of numerous individual variables. The metrics in Figure 18 sort the effect of each variable on PEV purchase influences by whether they are positive or negative and by the relative degree of influence they exert. The largest positive influences on PEV purchase intentions are that the respondent is male, has researched PEVs in the last six months, plans to buy his next new vehicle later rather than sooner, or has spoken to PEV owners. Some other positive and important influences are: living in an urban area; planning to make the next purchase a sedan (instead of a large SUV or pickup); and taking extended trips. Concerns about the safety, reliability, and range of PEVs have the largest negative influence on PEV purchase intentions, followed by non-commuting driving behaviors and demographics (age and length of time at current residence). Early adoption 8% Driving behavior 14% Parking characteristics 8% Figure 17 Summary of Statistical Results Numerous Factors Influence How Likely Consumers are to Purchase a PEV Negative Influence Has concerns about safety, reliability and range of PEVs Percent of non-commute miles driven less than 50 mph Length of time lived at residence Older Positive Influence Male Research PEVs on the internet in the last 6 months Number of months until next new vehicle purchase Spoke to PEV owners in the last 6 months Owns residence Lives in Nashville, Knoxville, Chattanooga, or Memphis Next vehicle is subcompact, sedan or crossover SUV Annual number of long trips greater than 250 miles Percent of commute miles driven less than 50 mph Parks in driveway Self-identifies as an early adopter or early majority Friends influence vehicle choice Has an outlet within 25 feet of parking location Requested PEV brochure in last 6 months Visited and/or talked with a dealership that has PEVs Figure 18 The factors that influence whether individuals are likely to purchase a PEV are comprised of numerous individual variables. These variables either negatively or positively affect electric vehicle purchase likelihoods at different levels. Consumer Expectations for Electric Vehicles 15 October 2011

TVA ELECTRIC VEHICLE SURVEY Consumer Expectations for Electric Vehicles Survey respondents initial intentions and perceptions regarding PEVs establish a baseline that reflects what people know and think today based on information they encounter. The survey provides the respondent with considerable information about PEVs that likely influence what to expect for ownership. The impact of this instruction and tutorial is revealed by comparing the results of pre-survey and post-survey purchase intention scores. Increased Likelihood of PEV Purchase After Reviewing Vehicle Information Figure 19 illustrates the differences in PEV purchase intentions before and after respondents received the education. Respondents post-education purchase intentions were analyzed by constructing a model to quantify the impact of which factors had the greatest impact on increasing their purchase intentions. Figure 20 (next page) summarizes the relative impact of each of these factors. As the figure shows, the review of the PEV research and demographic characteristics had the largest influence on whether respondents increased their score. Average Purchase Likelihood 80 60 40 20 0 76 71 15 Gasoline or Diesel Hybrid-Electric Electric Vehicles Each of the factors presented in Figure 20 is comprised of numerous individual variables. The metrics in Figure 21 (next page) sort the effect of each variable based on its relative degree of influence regarding whether and how much the respondent increased his PEV score. Individuals who increased their PEV purchase likelihood are largely influenced by understanding the range of PEVs and how they work. Older individuals are less likely to increase their PEV score than younger individuals and those that have previous knowledge of PEVs are less likely to increase their score than those that do not. 15 Before Vehicle Information After Vehicle Information Figure 19 How does electric vehicle information change respondents PEV purchase likelihood? 9 14 Profile of Likely PEV Purchases People who state that they are likely to purchase an PEV tend to: Male, young, live in Nashville, Knoxville, Chattanooga, or Memphis. Park in the driveway, have an outlet within 25 feet of parking location. Have knowledge of PEVs through internet research, visiting or talking to dealerships, requesting a brochure about PEVs, or contact with PEV owners. Plan on buying a new vehicle in 12 to 36 months as opposed to 6 to 12 months from now. Plan on buying a subcompact, sedan, or crossover SUV as their next vehicle. Believe that PEVs are as safe and reliable as gas vehicles and do not have range anxiety. Identify themselves as an early adopter of new technologies or early majority. Not all of the relationships are intuitive. People who state they are more likely to purchase a PEV: Take more annual trips longer than 250 miles. TVA Electric Vehicle Survey 16 October 2011

Other positive influences that increased individual s PEV scores included: learning from the information material that there may be multiple charging locations available for PEVs and that there are multiple charging options for PEVs (e.g., Level 1 versus Level 2 charging). Individuals who increased their score are also more likely to have shorter commutes; be male; have completed more years of education; have shorter commutes; put fewer annual miles on their vehicles; identify themselves as early adopters; and are not concerned about the safety, reliability, and range of electric vehicles. Influences of Education on PEV Purchase Intention People who increased their PEV purchase likelihood after reviewing the vehicle information tend to: Male, young, completed more years of education. Have shorter commutes and put fewer annual miles on their vehicle. Review of PEV information 31% Early adoption 3% Demographics 19% Driving behavior 13% Residental and parking characteristics 11% Believe that PEVs are as safe and reliable as gas vehicles and do not have range anxiety. Identify themselves as an early adopter of new technologies. Have test driven a PEV in the last 6 months. Understand how PEVs work, understand there are multiple charging options and locations for PEVs. Concerns about safety, reliability, and range of PEVs 6% Vehicle purchase characteristics 8% PEV research and knowledge 9% Figure 20 Summary of Statistical Model Results Numerous Factors Influenced Consumers Increase in PEV Purchase Likelihood Negative Influence Positive Influence Older Has previous knowledge of PEVs Parks in driveway Has concerns about safety, reliability and range of PEVs Lives in Memphis Commute miles Availability of the kinds of PEVs Number of months until next new vehicle purchase Percent of commute mile driven less than 50 mph Student Annual number of trips greater than 250 miles Wealth Parks in garage Annual miles driven Understanding the range of PEVs Understanding how PEVs work Knowing there are multiple charging locations Knowing there are multiple charge/refuel options for PEVs Coworkers influence vehicle choice Male Self-indentifies as an early adopter of new technologies Test drove an PEV in the last 6 months Years of education Understand the amount of time needed to charge an PEV Figure 21 The factors that influence whether individuals increased their PEV purchase likelihood are comprised of numerous individual variables. These variables either negatively or positively relate to whether a respondent increased his PEV purchase likelihood. Consumer Expectations for Electric Vehicles 17 October 2011

FINAL THOUGHTS EPRI s PEV survey research provides a current and initial portrayal of what consumers know and think about plug-in electric vehicles, in particular, the role consumers see their utility playing in providing electric vehicle transportation services. In addition, the results also provide insights into the types of consumers that are most likely to purchase PEVs and how their purchase intent is affected by factors within and outside of the control of their electric utility. The TVA regional research confirms much of what EPRI has learned from surveys conducted in other parts of the country. Consumers report a high awareness of electric vehicles. They associate electric vehicle ownership and operation with their electric utility, and they expect and want their utility to provide them with information about PEVs. They see their utility helping them determine if their home is PEV-charging ready. Finally, respondents indicate that the availability of public charging is an important component of their decision to purchase a PEV in the next five years, and they see their utility as playing an important part in the provision of public charging facilities. The research produced some indication of how quickly PEVs will be added to the passenger vehicle fleet. About one in ten respondents that expect to purchase a new vehicle in the next five years appears to be a likely PEV buyer, but only if the make and model they prefer is available. An important research need is to understand the extent to which the limited availability of PEVs in a wide range of makes and models holds back adoption. That level of adoption may be high relative to current sales and production volume. Nevertheless, even if adoption is half that rate, it foretells the start of a trend that could add substantial PEVs to the fleet by 2020. Therefore, in addition to collecting customer expectation surveys at other sites throughout the country, developing methods for forecasting long-term PEV adoption rates is a logical next step for consumer research. ACKNOWLEDGEMENT EPRI is indebted to James Ellis and Chad McGhie of TVA for the insight and direction they provided through the project. The Electric Power Research Institute, Inc. (EPRI, www.epri.com) conducts research and development relating to the generation, delivery and use of electricity for the benefit of the public. An independent, nonprofit organization, EPRI brings together its scientists and engineers as well as experts from academia and industry to help address challenges in electricity, including reliability, efficiency, health, safety and the environment. EPRI also provides technology, policy and economic analyses to drive longrange research and development planning, and supports research in emerging technologies. EPRI s members represent more than 90 percent of the electricity generated and delivered in the United States, and international participation extends to 40 countries. EPRI s principal offices and laboratories are located in Palo Alto, Calif.; Charlotte, N.C.; Knoxville, Tenn.; and Lenox, Mass. Together... Shaping the Future of Electricity The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for utility and business customers in most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia an area of 80,000 square miles with a population of 9 million. TVA operates 29 hydroelectric dams, 11 coal-fired power plants, three nuclear plants and 11 natural gas-fired power facilities that can produce about 34,000 megawatts of electricity, delivered over 16,000 miles of high-voltage power lines. TVA also provides flood control, navigation, land management and recreation for the Tennessee River system and works with local utilities and state and local governments to promote economic development across the region. TVA, which makes no profits and receives no taxpayer money, is funded by sales of electricity to its customers. Electricity prices in TVA s service territory are below the national average. EPRI Resources Bernard Neenan, Technical Executive, EPRI 865.218.8133, bneenan@epri.com Jason Kinnell, Principal Economist, Veritas Economics 919.677.8787, ext. 108, jkinnell@veritaseconomics.com 1022729 October 2011 Electric Power Research Institute 3420 Hillview Avenue, Palo Alto, California 94304-1338 PO Box 10412, Palo Alto, California 94303-0813 USA 800.313.3774 650.855.2121 askepri@epri.com www.epri.com 2011 Electric Power Research Institute (EPRI), Inc. All rights reserved. Electric Power Research Institute, EPRI, and TOGETHER... SHAPING THE FUTURE OF ELECTRICITY are registered service marks of the Electric Power Research Institute, Inc.