Influencing factors of trucking companies willingness to shift to alternative fuel vehicles

Freight transportation is a manifestation of a vibrant economy, but it is also associated with negative externalities such as greenhouse gas emissions. To mitigate these impacts, freight vehicles using alternative fuels have been developed, but they are not widely adopted. Moreover, there is not much information on the factors that could incentivize trucking companies to adopt such vehicles, especially in emerging economies where diesel engines dominate the market. Using Colombia as a case study, this paper aims to evaluate the factors that influence businesses to shift towards acquiring trucks powered by alternative fuels, applying an econometric approach based on discrete choice models. Results suggest that demand for alternative fuel vehicles (AFVs) is highly sensitive to purchase costs, operational range, and environmental awareness. Hybrid fuel alternatives seem to be preferred over electric and compressed natural gas vehicles. The analysis is supplemented with the estimation of marginal substitution rates, elasticities, and the simulation of scenarios considering subsidies and tax exemptions, from which we identify implications and draw policy recommendations to promote the use of AFVs.