About the Project Promoting adoption of energy-efficient vehicles has become a key policy imperative in both developed and developing countries. Understanding the impact of various factors that affect adoption rates, such as: (i) consumer related factors – demographics, behavioral, psychographics; (ii) regulatory factors – policies, incentives, rebates, perks; and (iii) geo-temporal factors – weather, infrastructure, network effects; forms the backbone of KAPSARC’s efforts in the transportation field. Our team is currently developing models at different levels of resolution – micro level models using large-scale data comprising of new car buyers’ profiles and macro level models using aggregated adoption data, to understand and project the effects of various factors at play for the adoption of energy-efficient vehicles. Key Points Consumer adoption of fuel-efficient vehicles is a crucial step in improving energy use and reducing emissions from the transportation sector. The range of options includes hybridization of powertrains all the way through to fully electric vehicles. To promote adoption, policymakers have employed supply side policies such as the Greenhouse Gas (GHG) Emissions/Corporate Average Fuel Economy (CAFE) standards and the Zero Emission Vehicle (ZEV) mandate, which require automakers to produce and sell fuel-efficient and alternative fuel vehicles. In addition, demand side measures in the form of financial and non financial incentives promoting ZEV adoption have also been employed. We measure the changes in consumers’ purchase motivations and potential demand in the wake of such programs by analyzing the past 11 years of new vehicle buyer survey data in the United States as a case study. We find that: Hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs), collectively termed xEVs, had the potential to secure as much as ~11 percent of the U.S. automotive market in model year 2015, but the actual market share was only one-third of this. A narrowing of the consumer’s valuation gap between buyers of non xEVs and xEVs for purchase motivations – including fuel economy, environmental friendliness, technical innovation and price – is increasing the potential consumer demand for xEVs. The term valuation gap refers to the difference between the average rating given by buyers of non xEVs and buyers of xEVs for a particular purchase motivation question in the survey. The closer the ratings, the smaller will be the valuation gap. Policy instruments such as sales weighted fuel economy target show strong correlation with the consumer valuation gap. In combination with demand side policies that make xEVs more accessible to mainstream consumers, they could be considered as viable tools if policymakers are seeking to nudge consumers toward xEVs.