An Examination of the Market for Low Emission Vehicles in London

London traffic


In recent years, car ownership in London has stabilised or even declined, while public transport use has risen dramatically. Of interest now for London policymakers is not just the number of cars owned but also their types, and in particular the factors — interventions or exogenous — that will influence a shift towards lower emission vehicles.

RAND Europe, working in partnership with MVA Consultancy, developed a model for Transport for London (TfL) to enable them to examine the market for low emission vehicles in order to forecast the CO2 emissions produced by the private car fleet in London.

RAND Europe’s role in the project was to undertake a literature review to identify the factors that impact on type choice and usage, and identify sensitivities to these factors that could be applied in the London context. The project team then developed a user-friendly spreadsheet tool that implemented the ownership, type choice and usage models to allow forecasts to be produced that are sensitive to policy assumptions about the relative costs of the different vehicle type alternatives, and the expected improvement in alternative fuelled vehicle performance over time, specifically improved acceleration and range characteristics.


Previous studies have been overwhelmingly based on supply side assumptions, akin to ‘if you build enough vehicles and supply the infrastructure’ people will buy them. This study reversed that assumption and took a more traditional ‘bottom up’ approach to forecasting market shares, centred on the factors which will influence consumer choices.

The project team extended existing models of car ownership to predict demand segmented by type choice and usage. To model car type choice, petrol and diesel vehicles were segmented by CO2 emission band, and separate categories were used for electric and alternative fuelled vehicles.


A major shift to low emission vehicles in the private fleet is likely to be essential to any aspirations for TfL to deliver significant reductions to its carbon footprint and meet desired environmental outcomes. Some of the project team's findings concerning the model they developed include the following:

  • A number of non-cost attributes — including range and acceleration for electric vehicles — were identified as pertinent to the choice of non fossil fuel alternatives and appropriate sensitivities sourced.
  • Policy testing has proved that the transport model has plausible sensitivities to key levers and the extent to which changes in these can influence consumers towards purchasing more environmentally friendly alternatives.
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