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MIT/Ford/Shell Research Workshop, Tuesday June 9 2009, Dearborn , MI

“Strategies for Market Transitions to Alternative Energy and Transportation Systems” 

Introduction, Workshop Agenda, Downloadable Presentations, and Organization

Prepared by Jeroen Struben, Tel: +1-514-398-4033 Email:


The purpose of our research program is to obtain an in-depth understanding of the major challenges in transitioning away from a fossil fuel and carbon based private transportation system, and to identify high leverage opportunities to overcome such challenges. With increasingly volatile oil prices, unprecedented US dependence on imported petroleum, and growing environmental concerns, the creation of economically sustainable markets for alternative - fuel vehicles (AFVs) is vital to the success of automakers and fuel and energy suppliers, and to the health of the US, and global economies. However, to date, most efforts to transition away from a transportation system dominated by the gasoline fueled internal combustion engine have failed or had very limited success. Diffusion of AFVs is complex, being both enabled and constrained by powerful positive feedback arising from various scale and scope economies and experience curves throughout the automotive and fuel supply chain, and from consumer behavior and word of mouth. Outcomes are strongly conditioned by decisions from diverse players including energy companies, governments, automotive OEMs and their suppliers, utilities, and consumers. Moreover, a successful transition to a self-sustaining AFV market requires intensive coordination and commitment among key decision-makers. While such a transition will play out over decades, mobilization of resources over the next decade has long-run consequences, for firms, industry, and society. In this research we develop behavioral dynamic models with a broad scope that are uniquely suited to address critical questions that decision makers face in this market transition. This project is part of a large, ongoing multi-year program at MIT's Sloan School of Management. Co-lead researchers are Prof. Jeroen Struben and Prof. John Sterman .

In this particular project we focus on the joint diffusion dynamics of and competition among AFVs powered by bio - based feed stocks, electricity, hydrogen, and hybrid blends. We examine various policy, technology, and fuel pathway scenarios. We build upon prior research in which we have developed a dynamic and spatially disaggregated model with a broad scope, grounded in economic, social-behavioral, operations management, and consumer demand theory. The models include the major mechanisms that condition AFV market formation as mentioned above. The fuel supply chain of the integrated model includes fuel markets, entry and exit of plants, installation and operating costs, and traces life - cycle carbon- and energy - intensities for each pathway. The model captures not only factors involving increasing returns, such as production learning and scale economies, but also diminishing returns factors, such as from land constraints on biofuel production.

The model simulates the interaction of different key actors over time, together producing the conditions for success and failure. For example, the model endogenously creates important rebound effects, such as the emergence of more fuel - efficient vehicles, competing with alternatives. Because there is substantial uncertainty over many aspects of the emerging markets, extensive sensitivity analysis is being conducted to generate dynamic confidence bounds for key outcomes. As part of confidence building in our insights we draw on rich data with a variety of sources, including major auto and energy companies, the USDA, EIA, GREET, and the US Census. Further, following standard protocols in system dynamics, we emphasize “modeling for learning” the model will be designed to stimulate senior management/policy maker dialogue and engagement as input to an informed strategy process, rather than as a black box generating predictions. To facilitate such use, the model structure will be fully accessible and available. Toward that end, we are inviting major players and key decision makers from various industries and governments and other stakeholders to convene a workshop to jointly explore the model's causal structure, assumptions, and insights, and to develop scenarios of their own choosing.

Financial support for and partnership to this project has been provided by Shell Hydrogen, Ford Motor Company, the National Renewable Energy Laboratory (grant XCO-5-55516-01), and the Project on Innovation in Markets and Organizations (PIMO) at the MIT Sloan School of Management


Workshop Agenda

Strategies for Market Transitions to Alternative Energy and Transportation Systems


•  Welcome by John Viera (Director, Sustainable Business Strategies, Ford Motor Company, 9:00 AM )

•  Introductions, Motivation, Problem, and Approach ( Jeroen Struben 9:10 - 10:05 am)

IIIa) Various perspectives - industry and other stakeholders (10:20 am - 12 pm; 15 mins each)

**** Lunch 12:00 – 1:00 pm ****

IIIb) Various perspectives – studies and discussion (1:00 - 2:15 pm; 15 mins each)

IV) Scenario Analysis supported by MIT model (2:30 – 4:00 pm, Jeroen struben)

V) Discussion and looking ahead (4:00 – 5:00 pm)


Workshop Organizers and Project Contacts 

Jeroen Struben
Assistant Professor, Desautels Faculty of Management, McGill University
Research Affiliate, MIT Sloan School of Management
Co-MIT Project Leader "Market Transitions for Alternative Energy and Transportation Systems"
Project contact

David P. Chock
Senior Technical Leader
Ford Research and Advanced Engineering
Ford Motor Company

Nikunj Gupta
Technology Advisor - Hydrogen
Shell Future Fuels
Shell Oil Company

John D. Sterman
Jay W. Forrester Professor of Management
Director, MIT System Dynamics Group
MIT Sloan School of Management
Co-MIT Project Leader "Market Transitions for Alternative Energy and Transportation Systems"



Ford Research and Innovation Center , 2101 Village Road , Dearborn , 48121, Michigan

Back to AETT Project Website (under construction), or to Jeroen Struben Website