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Around 20% of total greenhouse gas emissions occur in transportation, 85% of which takes place in road traffics. Environmentally friendly vehicles are a transport type which has less environment impacts compared to existing internal combustion engine vehicles. Among them hybrid electric vehicles (HEVs) have increased steadily in South Korea. This paper analyzes the sales of YF SONATA HEV and K5 HEV, which account for 85% of the domestic HEV market, compared to gasoline engine versions of the same models from Total Cost of Ownership (TCO) viewpoint. The relationship between the vehicleâ€™s TCO and HEV sales share were analyzed as well as the consumerâ€™s perception about the value associated with purchasing HEVs. This research conducts a quantitative study on the necessary government incentives on HEV sales for the expansion of HEV market in Korea. This work could contribute to the design of government policy to promote environmentally friendly vehicles. Additionally, this work can serve to analyze the effect of such incentive policies on environmental conservation and reduction of social expenses.

Analyzing Factors of Hybrid Electric Vehicle Adoption Using Total Cost of Ownership