Subset of 2011 to 2013 Model Year Vehicles: Who Buys What Car? Analysis of Feebates and Household Impacts in California Julie Schiffman and Lew Fulton Institute of Transportation Studies, University of California, Davis - May 2015 Contacting the Authors: Julie Schiffman Lew Fulton Background and Motivation This analysis builds on the 2008 to 2011 UC Davis feebate study. It focuses on feebate design alternatives that might best meet requirements related to a low carbon/ZEV vehicle roll-out over the coming decade. We use data from the 2010 to 2012 California Household Travel Survey It updates the previous UC Davis analysis of a potential state-level feebate policy in an effort to: Meet specific revenue requirements Consider the second hand market Study ZEV-specific consumer behavior modeling Study the distribution of costs and benefits across demographics Summary We assess the potential cost implications of different ZEV market development pathways in terms of required subsidies and other incentives that would need to be provided by the State of California through This will take into account medium term targets for sales and market shares of ZEVs over the next 10 years, and an understanding of how to meet these targets. We will conduct analyses of how to minimize these costs through cost-effective policy making, along with establishing ranges of uncertainty. We rely on a recent data set of vehicle sales in California, and the characteristics of households and the vehicles purchased. We will project this into the future to identify potential market conditions in 2020 and The analysis will focus on alternative feebate mechanisms and designs to help achieve the target(s). The feebate design will be evaluated on various strengths and weaknesses, and their potential impacts on different population segments, with a particular emphasis on incomes. Approach / Data analysis Research Questions How much financial support is necessary to fully introduce ZEVs into the California market? What role could a California light-duty vehicle feebate play in accelerating the commercialization of ZEVs and other low-carbon vehicles by providing financial incentives to consumers and automakers and aligning price signals with state and national-level fuel economy and GHG performance regulation, thereby supporting the performance regulations What would be the best feebate policy design to: Reach identified revenue and ZEV sales targets Be cost-efficient, easily administered and societally acceptable Balance the concerns of various stakeholders and achieve the greatest political acceptability Background Data/Preliminary Results Statistics from CHTS Our analysis of the 2011 to 2013 vehicle from the California Household Travel Survey reveals: 7.3% of the vehicles are Model Years 2011 to % of new vehicles purchased were SUVs and 46% are sedans Mean MSRP decreased from Model Year 2011 to 2012 and appears to increase with the early 2013 Model Year purchases Consumers purchased vehicles with increasing mean fuel economy 77% of new car buyers had an income of at least $75,000 (62% have an income of at least $100,000) 12% of the new vehicles purchased were BEV, PHEV, or hybrids (mostly hybrid) 89% of the new BEV, PHEV, and hybrid vehicles were purchased by households with incomes greater than $75,000 The number of BEV, PHEV, and hybrids decreased from Model Year 2011 to 2012 by nearly 22% The number of SUVs decreased from Model Year 2011 to 2012 by nearly 16% The State of California is interested in accelerating the penetration of low-carbon vehicles, including zero-emissions vehicles. The ZEV mandate requires 15% of vehicles sold in California are zero emission by Development of this market requires support by vehicle manufacturers, government, and other stakeholders. California can implement a feebate policy – a system of fees and rebates on car sales. Feebates can be a powerful since they can send up-front price signals to producers and consumers about what cars to buy and sell. They can help raise revenue to support needed investments and incentives for ZEVs and other low-carbon vehicles. Feebates have the potential to address concerns of policy makers about the equity implications of current incentive policies. A Look at Fuel Economy