Managing the Diffusion of Low Emission Vehicles

Abstract

There is significant uncertainty among technology providers, governments, and consumers about which technology will be the vehicle technology of the future. Governments try to stimulate the diffusion of low emission vehicles with diverse policy measures such as purchase price subsidies. However, the effect of such support measures on the speed and direction of technological change is unclear as different vehicle technologies might be preferred under different policy conditions. Decision makers, such as firm actors involved in green technology management, are thus strongly dependent on government policy when making strategic decisions. For these firm actors, determining their strategy regarding low emission vehicles is a complex task in a changing environment of coevolving consumer preferences, technology characteristics, and green technology policies. This paper presents an agent-based model of the competition between several emerging and market-ready low emission vehicle technologies and the dominant fossil-fuel-based internal combustion engine vehicles. The simulations illustrate the effects of different policy measures on technological change and their implications for the strategic actions of firm actors. More specifically, collaboration and standardization strategies can lead to synergies that contribute to technological change without risking early lock-in.