The use of motor fuels by light-duty vehicles is a major contributor to oil demand and greenhouse gas emissions. The rate of introduction of alternative fuel vehicles will be an important influence on the time path of fuel use and emissions, and the sustainability of transportation patterns. The Transitional Alternative Fuels Vehicle (TAFV) Model simulates the use and cost of alternative fuels and alternative fuel vehicles over the time period of 1996 to 2010. It is designed to examine the transitional period of alternative fuel and vehicle use. It accounts for dynamic linkages between investments and vehicle and fuel production capacity, tracks vehicle stock evolution, and represents the effects of increasing scale and expanding retail fuel availability on the effective costs to consumers. Fuel and vehicle prices and choices are endogenous. The model extends previous, long-run comparative static analyses of policies that assumed mature vehicle and fuel industries. As a dynamic transitional model, it can help to assess what may be necessary to reach mature, large scale, alternative fuel and vehicle markets, and what it may cost. Various policy cases are considered including continued ethanol subsidies, tax incentives for low greenhouse gas emitting fuels, and the absence of transitional barriers. (In particular we find that a tax subsidy on low greenhouse gas emission fuels equal to the current
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