This paper presents a system dynamics simulation model used to predict the market share penetration of hybrid (HEV) and battery electric vehicles (BEV) over time. The utility of the model for early design decision making stems from its ability to link key influencing factors such as: fuel price fluctuations, government incentives, customer network effects, vehicle cost of ownership/operation and initial retail price differences between alternative vehicles to the internal combustion engine (ICE) reference architecture in a transparent mathematical formulation. The simulation model is set to the 2010 conditions of the light duty vehicle market in the United States and run for a period of ten years from 2010-2020. After 200 iterations with varying fuel prices, the simulation results predict that by 2020 market advances of hybrid cars will go from 4.5% to roughly 14% and electric cars from 0% to roughly 5% market share of new vehicles sold. The estimated figures presented are in line with previously published market analyst estimates. Additionally, the model has the added advantage of experimenting on how influencing factors affect the simulation results.
