Understanding the Transition to New Fuels and Vehicles: Lessons Learned from Analysis and Experience of Alternative Fuel and Hybrid Vehicles

This chapter discusses the lessons learned by the US from the analysis and experience of alternative fueled vehicles (AFV) and hybrid electric vehicles (HEV). Despite the range of federal, state, and local initiatives to promote alternative fuel use since the 1980s, there has been little progress in developing alternative fuel infrastructure, advancing the alternative fuel transition, or achieving alternative vehicle sales and fuel sales in the country. In analyzing the transition to alternative fuels other than hydrogen such as ethanol, methanol, CNG, LPG, and electricity analyses with the transitional alternative fuel and vehicle (TAFV) model led to some important conclusions that bear on the proposed hydrogen transition. The barriers to new fuels and technologies are real and economically important. Some barriers are transitional, and some barriers will endure so long as overall market conditions including oil prices and environmental policies do not change fundamentally. For AFVs, the most important barriers seem to be limited fuel availability and vehicle scale economies. For HEVs, incremental vehicle costs are large. As a result, vehicle scale economies matter, but scale cost reductions are more easily attained by the use of widely shared components-such as batteries, motors, and controllers-across multiple vehicle platforms.