Market Penetration of Alternative Fuel Vehicles in Iceland: A Hybrid Modeling Approach

In this paper, an integrated agent-based (AB) and system dynamics (SD) model is developed to study the market share evolution of light duty vehicles in Iceland. The model takes into account the conventional internal combustion engine vehicles that are currently dominant in the market and the alternative fuel vehicles including various types of electric vehicles, bio-fuels and fuel cell vehicles. SD approach is used to simulate the development of continuous, homogenous and aggregate variables of the energy supply system over time. The AB approach is employed to study the consumer behavior and market share evolution of passenger vehicles. Different vehicles compete for market penetration through a vehicle choice algorithm that accounts for social influences and consumers’ attractiveness for vehicle attributes. The linking variables between AB and SD components are identified and then these two bottom-up and top-down approaches are integrated to provide a comprehensive framework. The main results provided by the application of this modeling approach for the case study of Iceland are market share evolution of various vehicle types and consumers’ fuel demands during the period 2013–2050.