The plugin looks in the workspace directory when searching for the specified AVD. The AVD (named "Image") is present in ~/.android/avd, but it looks in ~/workspace/<test-name>/.android/avd instead.

15:59:12 FATAL: /Users/lkung/workspace/appium-android-test/.android/avd/Image.ini (No such file or directory)
15:59:12 java.io.FileNotFoundException: /Users/lkung/workspace/appium-android-test/.android/avd/Image.ini (No such file or directory)
15:59:12 at java.io.FileInputStream.open(Native Method)
15:59:12 at java.io.FileInputStream.<init>(FileInputStream.java:138)
15:59:12 at java.io.FileReader.<init>(FileReader.java:72)
15:59:12 at hudson.plugins.android_emulator.util.Utils.parseConfigFile(Utils.java:478)
15:59:12 at hudson.plugins.android_emulator.SdkInstaller$3.call(SdkInstaller.java:365)
15:59:12 at hudson.plugins.android_emulator.SdkInstaller$3.call(SdkInstaller.java:362)
15:59:12 at hudson.remoting.UserRequest.perform(UserRequest.java:118)
15:59:12 at hudson.remoting.UserRequest.perform(UserRequest.java:48)
15:59:12 at hudson.remoting.Request$2.run(Request.java:326)
15:59:12 at hudson.remoting.InterceptingExecutorService$1.call(InterceptingExecutorService.java:72)
15:59:12 at java.util.concurrent.FutureTask$Sync.innerRun(FutureTask.java:334)
15:59:12 at java.util.concurrent.FutureTask.run(FutureTask.java:166)
15:59:12 at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1145)
15:59:12 at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:615)
15:59:12 at java.lang.Thread.run(Thread.java:724)

When a symbolic link is created in the workspace dir to ~/.android/avd or the .ini and .avd files are copied to the workspace, the AVD is invalid (error: missing kernel file).

16:16:42 $ /Users/lkung/tools/android-sdk/tools/android list target
16:16:43 [android] Using Android SDK: /Users/lkung/tools/android-sdk
16:16:43 $ /Users/lkung/tools/android-sdk/platform-tools/adb start-server
16:16:43 [android] Starting Android emulator
16:16:43 [android] Erasing existing emulator data...
16:16:43 $ /Users/lkung/tools/android-sdk/tools/emulator -no-boot-anim -ports 59381,59382 -avd Image -no-snapshot-load -no-snapshot-save -wipe-data -http-proxy 10.15.11.60
16:16:43 emulator: ERROR: This AVD's configuration is missing a kernel file!!
16:16:46 * daemon not running. starting it now on port 59383 *
16:16:46 * daemon started successfully *
16:17:48 [android] Emulator did not appear to start; giving up
16:17:48 $ /Users/lkung/tools/android-sdk/platform-tools/adb disconnect localhost:59382
16:17:48 [android] Stopping Android emulator
16:17:48 $ /Users/lkung/tools/android-sdk/platform-tools/adb kill-server

I tried setting $ANDROID_SDK_HOME to $HOME and $ANDROID_SDK_ROOT to $ANDROID_HOME using the EnvInject plugin, but neither of those worked.

Edit: The emulator image runs fine when launched locally ("emulator @Image").