Alternative Fuel Vehicles Alternative Fueled Research Proposal

Excerpt from Research Proposal :

I do that every day. But I've never done that with a car. I buy what I need to look successful. Besides, how would I ever calculate a payback when I have no idea what gasoline will cost in the future?" A few said with apparent certainty, "one year" or "two years." However, when we inquired where the number came from, they simply asserted that they spent lots of money on gasoline and would quickly earn their money back through savings. A smaller group proposed longer terms -- eight to ten years -- noting that they keep their cars for a long time. Several households explained that their lack of attention to gas costs was due to the fact that they felt they couldn't do anything about it; they had to drive as much as they did to lead the lives they had constructed for themselves." (Kurani, Turrentine, and Heffner, 2007)

Kurani, Turrentine, and Heffner state in regards to the choice of a hybrid vehicle that there have been a number of articles in the mainstream media and it has been noted as well by the automotive press "that the buyers of hybrids do not make the extra cost of their vehicles back through gas savings. These articles contended that hybrid vehicles cost $2,000 to $3,000 more than vehicles of similar size and power. Our small group of hybrid vehicle buyers confessed they had never thought of or calculated a payback when they bought their hybrid. In fact, these people surprised us with how little attention they paid to fuel costs. They did pay a lot of attention to fuel economy. Drivers of hybrids confessed that they watched their fuel economy gauges compulsively. But none kept track of costs. They liked how much better their car's MPG was than other cars, and their gauges made them feel good about their vehicle choice. It turns out they bought hybrids mainly for ideological reasons, and not to save money." (2007)

Kurani, Turrentine, and Heffner report being surprised by these findings so they designed a follow-up study to examine a larger group of hybrid buyers as they state they wanted to "...get a better sense of what motivated purchases of the highest fuel economy vehicles on the market. We built on what we learned from the first study: that consumers look to the media, to experts, and to other consumers to help them decide what to do. Their decisions around cars, fuel economy, and hybrid vehicles drew on social awareness, but not on calculations. They saw the price of gasoline posted at every gasoline station. They listened to reporters talk about gasoline prices on the news. They talked about cars with friends at church or work." (Kurani, Turrentine, and Heffner, 2007)

The findings in the second study state that "decisions about fuel economy were governed more by emotions than by analysis, more by what fuel economy means that by its monetary value." In fact, findings show that in the months prior to the purchase of a hybrid that the buyers were thinking and conversing about the costs of gasoline as well as about new technologies, the security of the nation and the future and environment. When these individuals went to purchase their car comparison shopping against other fuel-efficient compact cars did not take place and the hybrid buyers participating in the study "were more likely to have only one vehicle in their choice set: the particular hybrid they bought." (Kurani, Turrentine, and Heffner, 2007)

It is reported that these individuals were more likely to be "replacing a pick-up truck, SUV, or high-priced luxury car than a small economy sedan. And they often described the decision to buy a hybrid as an exciting moment of commitment to a new set of values." (Kurani, Turrentine, and Heffner, 2007) in the event that fuel economy was spoken of by a hybrid buyer it is stated that it was "usually an aesthetic value rather than a financial one, experienced through their new fuel economy gauges. Some hybrid drivers can watch their vehicle's fuel economy minute-to-minute. One young man talked about the great pleasure he received from checking his fuel economy gauges at the end of a trip and seeing "what a good job" he did. Most of our hybrid buyers mentioned how much less often they refuel and even how much they are spending per fill-up. But they are no more likely than other drivers in our previous study to calculate costs over time. Some hybrid buyers are concerned about costs, but the costs are more symbolic than calculated, and are rooted in a buyer's attempt to look financially smart to themselves, friends, family members, and coworkers." (Kurani, Turrentine, and Heffner, 2007)

Conclusions stated by Kurani, Turrentine, and Heffner following the second study include that the "lack of knowledge and the inattention to costs by cars buyers may surprise some researchers. In defense of our survey subjects, car manufacturers don't make it easy for drivers to calculate or track MPG and fuel costs. Even those hybrid vehicles with advanced energy-use instruments show fuel economy only over short periods of time, and don't track daily, weekly, monthly, annual, or vehicle lifetime costs. Also, the differences in cost resulting from diverse driving styles, price variations between gas stations, or differences in fuel economy between similar car models are often small. So it's unsurprising that even hybrid buyers don't take the time to make calculations or comparison shop for vehicles of similar size or class." (Kurani, Turrentine, and Heffner, 2007)

In addition, it is stated that if more vehicles "...had instruments that tracked fuel use and costs, consumers might pay more attention to them. However, in many cases, such instrumentation might only demonstrate that different driving behaviors and even differences between similar car models do not bring large dollar payoffs. This does not mean that consumers do not care about fuel economy. A quick look at the current car market shows that buyers are shifting away from gas guzzlers. This is happening in a period of heightened attention to many issues related to fuel economy, including climate change and energy security as well as gas prices. But we cannot develop policies or create behavior models that assume drivers calculate costs or even that private cost is the main factor motivating consumers to choose better fuel economy. To be successful, vehicle choice models and policies based on those models must investigate more thoroughly all the aspects of fuel economy that motivate consumers." (Kurani, Turrentine, and Heffner, 2007)

The work entitled: "E-85 Everywhere" reports a Minnesota Consumer Perception Survey for E85 and Flex-Fuel Vehicles. Findings in this study state that female respondents report preferring ALA-recognized vehicles and fuel companies more than did their male counterparts. The number of individuals that were found to presently own a flex-fuel vehicle was stated at 6% while more than 55% of people report that they would purchase E85 when available. Also reported in the study findings is that more than 85% of respondents reported being familiar with E85 while male respondents reported a significant greater level of awareness than did female respondents. Reported as perceived benefits of E85 were those of: (1) clean fuel, environment-friendly and healthier air to breathe; and (2) renewable energy source. (Phoenix Marketing International, 2007)

It is reported in the work entitled: "Study: Car Ads Aren't Green Enough" that a recent survey reports that "auto advertisers' failure to talk green is costing them opportunities to reach mainstream buyers." (Connelly, 2007) According to the study conducted by MindClick Group, Inc. A marketing research firm in suburban Los Angeles "Consumers' environmental consciousness and interest in fuel efficiency outstrip the eco-messages they hear from automakers..." (Connelly, 2007) the survey reports that there is a "huge disconnect between the advertising and the amount of interest. Concerns about fuel economy and gasoline prices are whetting consumer appetites for information about hybrid and alternative fuel. Mileage and environmental performance have become major factors in vehicle purchase consideration." (Connelly, 2007) it is reported that consumer interest in green cars "extends well beyond tree huggers and cuts across the political spectrum. Among survey respondents who said they intend to buy a new vehicle, three-fifths were considering an alternative-fuel or hybrid vehicle. And of those, five out of six cited fuel economy as one of the most critical elements of purchase consideration." (Connelly, 2007) MindClick is stated by Connelly to slice the U.S. consumer market into six segments which reflect "varying concern about global warming." (Connelly, 2007) the survey of U.S. consumers reports the following findings:

(1) 58% of respondents who said they plan to buy a new car or truck considered an alternative-fuel or hybrid vehicle; of those 83% cited fuel economy as a critical reason;

(2) 21% of respondents who bought a vehicle in the past years said they recalled vehicle advertising with a green message. (Connelly, 2007)

The work of Struben and Sterman (2007) entitled: "Transition Challenges for Alternative Fuel Vehicle and Transportation Systems" states that "successful…

Sources Used in Document:


Turrentine, Tom; Kurani, Kenneth; and Heffner, Rusty (2007) Fuel Economy: What Drives Consumer Choice? Access. No. 31, Fall 2007. Online available at:

E85 Everywhere: Minnesota Consumer Perception Survey for E85 & Flex-Fuel Vehicles (Phase 2: Post-Advertising Campaign) (2007) Phoenix Marketing International Report of Findings. Online available at:

Connelly, Mary (2007) Study: Car Ads Aren't Green Enough. Automotive News. 13 Aug 2007. Online available at:

Struben, Jeroen and Sterman, John D. (2007) Transition Challenges for Alternative Fuel Vehicle and Transportation Systems. MIT Sloan School of Management, Cambridge, MA. Online available at:

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