Issues and Costs Associated with Transition to Alternative Transportation Fuels and Vehicles

Abstract

Key issues and barriers that must be overcome for the successful introduction of alternative-fuel vehicles are summarized. A host of market and institutional barriers faced by vehicle purchasers, vehicle manufacturers, fuel suppliers, and the vehicle service industry are broadly described. Although specific estimates of the costs of overcoming these barriers are highly uncertain, an initial estimate of the general magnitude of these transition costs is presented. This is done by analyzing the transition to a specific alternative-fuel vehicle market penetration for the year 2010. Transition costs are shown to be substantial.