Connection between Fuel Prices and Demand for Electric and Hybrid Cars

• Název práce v češtině: Vazba mezi cenou pohonných hmot a poptávkou po elektromobilech a hybridech
• Název v anglickém jazyce: Connection between Fuel Prices and Demand for Electric and Hybrid Cars
• Klíčová slova: ceny paliv, ceny benzinu, elektromobily, hybridní automobily, alternativní paliva
• Klíčová slova anglicky: fuel prices, gasoline prices, electric cars, hybrid cars, alternative fuel vehicles
• Akademický rok vypsání: 2018/2019
• Typ práce: bakalářská práce
• Jazyk práce: angličtina
• Ústav: Institut ekonomických studií (23-IES)
• Vedoucí / školitel: prof. PhDr. Ladislav Krištoufek, Ph.D.
• Řešitel: skrytý - zadáno vedoucím/školitelem
• Datum přihlášení: 09.05.2019
• Datum zadání: 09.05.2019
• Datum a čas obhajoby: 09.06.2020 09:00
• Datum odevzdání elektronické podoby: 07.05.2020
• Datum proběhlé obhajoby: 09.06.2020
• Oponenti: Mgr. Jan Šíla, M.Sc.

Seznam odborné literatury

Adilov, N. & Samavati, H. Atl Econ J (2009). Pump Prices and Oil Prices: A Tale of Two Directions. Atl Econ J (2009) 37: 51. https://doi.org/10.1007/s11293-008-9152-8

Brennan, J. W., Barder, T. E., Ph.D. (2016). Battery Electric Vehicles vs. Internal Combustion Engine Vehicles. Arthur D. Little 2016.

Denton, Tom (2016). Electric and Hybrid Vehicles. Oxon, [England]; New York, New York: Routledge, 2016.

International Energy Agency (2017). Global EV Outlook 2017. IEA Publications, 2017.

Larsson M. (2018). Transportation Systems, Renewable Fuels, and Energy Efficiency. In: Circular Business Models. Palgrave Macmillan, Cham.

Monzon, D., Stella, C., Aztiria, M. (2018). Electric mobility impact on downstream oil business. Arthur D. Little Luxembourg S.A. 2018.

Pinho, C. & Madaleno, M. Environ Econ Policy Stud (2011). CO2 emission allowances and other fuel markets interaction.

Vestus, William P. (2009). Fuel Prices: Rhyme or Reason? New York: Nova Science Publishers, Inc. 2009.

Předběžná náplň práce v anglickém jazyce

Research question and motivation

Since the start of the new millennium, many automotive companies began to realize that petrol and diesel engines are not the only possibility for powering cars, and as a reaction to the oil depletion and increasing pressure on being environmentally friendly, they started to come up with alternative ways of powering cars. As a result, electric vehicles are becoming more and more popular nowadays and it can be expected, that if this trend will continue in the future, they could have a significant impact on fuel prices.

Firstly, I would like to test the significance of increasing number of sold electric cars as a factor that could possibly affect fuel prices in a few countries, especially Norway and Iceland, where the ratio of electric cars sold has increased most rapidly of all countries in the last five years. It is obvious that the sales of electric vehicles are not the main factor affecting fuel prices, but it is a trend which is getting more and more popular and it could have an influence on the market for fossil fuels, at least in the future, as the number of electric cars sold increases rapidly every year. Therefore, I will discuss most of the factors affecting the prices of fuel within my thesis and I will include these factors in my model, which will test the significance of electric cars sales as a factor affecting the fuel prices. Secondly, I would also like to test the effect of the oil crises and oil price shocks. To be more precise, I would like to test, if the 2008 oil price shock caused increased demand for Toyota Prius, the best-selling hybrid vehicle in that time. Lastly, I would like to make a simple prediction for the future development of sales of electric cars and fuel prices, based on my models and existing literature.

I decided to do research about this topic, because I think that the trend of electric cars is getting more and more important nowadays and most people are trying to study the impact of these vehicles mainly on the environment, but not so many researchers are dealing with the effect on the fuel prices.

Hypotheses:

1. The increased sales of the electric cars could possibly cause a decrease in demand for gasoline and diesel, therefore they could cause a decrease in prices of these fossil fuels. I would like to test this effect in a country with a high ratio of electric cars sold (such as Norway) and eventually compare it with a country where the electric vehicles are not so popular, to see the difference.
2. During the times when the prices of fuel rise, such as oil crises and oil price shocks, people tend to prefer purchasing alternatively powered cars over traditional petrol/diesel powered cars. I would like to test this hypothesis on the Toyota Prius sales during the 2008 oil price shock.
3. As the number of electric cars sold increases over time and it is expected that it will continue to rise even more rapidly in the future, it is likely that the fuel prices will start to fall.

Contribution

The result of this analysis should provide information on whether this trend, which is getting more and more popular over the last decade, can be a significant factor affecting the demand for fossil fuels and therefore affecting the price of fuel. Vice versa, it should provide information, whether customers decide to purchase electric or hybrid vehicles, when the prices of fuel rise due to various reasons. Lastly, this research should help to predict a future development in this field. In terms of existing literature and data, most of the researches agree on the fact that the trend of electric vehicles will continue to develop rapidly and in the upcoming decades it will probably have an impact on the market for fuel. Regarding the second hypothesis, from the data available, it can be observed that the Prius sales increased during some periods of high prices of gasoline. However, these data need to be evaluated in an econometric model, in which the other factors affecting the car sales will be considered as well.

Methodology

The method used for testing the first hypothesis will be a linear regression model, which will include most of the factors which are affecting fuel prices and will test the significance of electric cars sales as a factor that could potentially affect these prices. Linear regression will be used for the second hypothesis as well, this time with electric/hybrid cars sales as a dependent variable and will include most of the factors that are affecting sales of these cars as the independent variables. With this model, I would like to test the significance of fuel prices as a factor that could have an influence on customers’ decision to purchase an alternatively powered vehicle instead of traditional petrol/diesel one.

Outline
1. Introduction
2. Theoretical Background
2.1 Development of the Market with Electric and Hybrid Vehicles
2.2 Development of Fuel Prices over the last two decades
2.3 Literature review
3. Hypotheses Development
4. Methodology description
5. Data analysis
6. Results and Discussion
7. Conclusion