In this paper, an agent-based model is developed to study the market share evolution of passenger vehicles in Iceland, a country rich in domestic renewable energy. The model takes into account internal combustion engine (ICE) vehicles that are currently dominant in the market and electric vehicles (EVs) that are likely to enter the market in the future. The vehicles compete for market penetration through a vehicle choice algorithm that accounts for social influences and consumers' attractiveness for vehicle attributes. The main result provided by the modeling approach is the market share of different vehicles during the time period 2012-2030. The effects of fuel prices, vehicle taxes, future price of EVs and recharging concerns on the market share are analyzed with the help of the model. The results show that EVs would seize the market completely in the scenario combined of high gasoline price, decreasing EV price without tax and no worry about the recharging of EVs. The successful penetration of EVs in the scenarios with low gasoline price and combination of medium gasoline price and constant EV price needs policy supports like tax exemption and an environment where consumers do not suffer from range anxiety.