Feasibility study on the Korean Government's hybrid conversion project of small diesel trucks for parcel delivery services

Abstract

The Korean government is planning an R&D project to convert existing small diesel trucks for parcel delivery services to diesel-electric hybrid trucks as part of its effort to reduce emissions of greenhouse gases and particulate matter (PM). This project started from the realization that parcel delivery trucks have become one of the main sources of PM emissions especially as the parcel delivery service industry has rapidly grown in Korea amid inefficient driving environment for delivery trucks. To evaluate the marketability and feasibility of the project, this study analyzed diesel truck owners' preferences for converting to hybrid vehicles. Hierarchical Bayesian choice-based conjoint analysis was employed to forecast conversion probabilities and willingness to pay for various vehicle attributes, and the influencing demographic factors were then analyzed. The demand forecasting results are expected to enable decision makers to set a reasonable budget for hybrid conversion. For policy implications, the findings suggest that truck owners should be allowed to pay for the conversion in installments, not in a lump sum, and it would be strategically effective to target the consumer segment that prioritizes fuel cost savings relative to other vehicle attributes to promote hybrid conversion. (C) 2019 Elsevier Ltd. All rights reserved.