Technology Transitions: identifying challenges for hydrogen vehicles

Automobile firms are now developing alternatives to internal combustion engines (ICE), including hydrogen fuel cells and ICE/electric hybrids. Adoption/diffusion dynamics for alternative powered vehicles are more complex than those typical of most new products, due to the enormous size and importance of the automobile industry, the size and impact of the vehicle fleet, the presence of scale and scope economies, learning by doing and through research, and the critical role of complementary resources such as fueling and maintenance infrastructure. We describe a model to examine the diffusion dynamics for and competition among hydrogen, hybrid and ICE vehicles. In this paper we focus on the generation of consumer awareness of alternative propulsion technologies through feedback from driving experience, word-of-mouth and marketing, with a reduced form treatment of network effects and other positive feedback (subsequent papers will treat these in depth). Through detailed model analysis we show the existence of a critical threshold for sustained adoption of new propulsion technologies and its importance for the diffusion dynamics. We further show that word-of-mouth from those not driving an alternative vehicle is important in stimulating adoption. Contact: Jeroen Struben System Dynamics Group, Sloan School of Management Massachusetts Institute of Technology Cambridge, MA 02188 Tel: 1-617-253-4361 Email: [email protected]