Assessing the demand for electric vehicles in Malta

Abstract

The European Union aims to reduce greenhouse gases by 20% (from 1990 levels) as part of the 2020 Climate Change and Energy Package. Seeing as internal combustion engine vehicles play a significant role in the excessive emissions of carbon dioxide, the promotion of electric vehicles can be a major contributor towards Malta achieving this goal. The study aims to assess the demand for electric vehicles in Malta, as well as to understand the motives and barriers towards adoption. An in-depth literature review is carried out to identify what has already been concluded about factors that have an effect on the demand, and each of the factors is considered in the context of Malta. This review is the basis for the development of the hypotheses regarding the factors that may be included in the demand function of electric vehicles in Malta. A survey is carried out so as to understand how these factors affect Maltese citizens, and to what extent. The data is analysed using correlations followed by multiple regression. The results show that demand, which is conveyed by intent to purchase, is affected by whether the buyers believe an electric vehicle is a good return on investment, whether they recycle, are interested in new technology, their income bracket, the number of children in their household, the amount they spend on fuel and the amount of time they are willing to walk for. It was also found that the amount one is willing to spend on an electric vehicle is dependent on intent to purchase and on the amount that they are willing to spend on a non-electric car. Interestingly, the results show that the presence of a government grant has no significant effect on intent to purchase or on willingness to pay. The information is then used to understand the implications with respect to marketers and policy makers, and also considers what can be done to increase take up of this relatively new product.