Oxford team suggests realizing EV revolution will require much better understanding of consumer behavior, policy and industry support
1 May 2012
Although the energy-saving and emissions reduction potential of battery-electric vehicle (BEV) technology has been shown, the scale of BEV diffusion necessary to decarbonize transport will not be realized without immediate and sustained policy support, industry investment and fundamental changes in consumer behavior, according to a team from the University the Oxford in a new paper.
The review, published in the journal Nature Climate Change, argues for an integrated approach to BEV diffusion that not only considers technological advancements but also the importance of better understanding consumer behavior—most importantly, how to incentivize early adoption, says Dr. Martino Tran, lead author.
Even with the most ambitious assumptions, BEVs may only provide a niche market over the next 20 years. Even then, this niche market will need to be supported during the early phases of diffusion. Policy can assist by providing free charging using renewable energy at publicly accessed parking places, but investors will need to anticipate under-utilization of charging infrastructure until the market matures. Industry could assist by exploring new business models such as vehicle leasing, which already makes up a share of US and UK vehicle markets. At present, BEVs are sold as a complete purchase, purchase of vehicle and lease of battery, and combined lease of vehicle and battery. Other models could include shared ownership or pay-as-you-go schemes similar to mobile phones.
Further attention should be given to the potential market for small short-range city BEVs, where there is opportunity to reduce range anxiety through public charging points or battery-swap stations. The costs of providing a low-speed leased BEV for local city use is far less than trying to replicate the current ownership model of all-purpose long-range ICE vehicle. Much of the literature assumes that the market is homogenous, but car manufacturers have been very successful in demonstrating a huge heterogeneity in the market. Within such an embryonic market we need to know more about the diffusion process, the characteristics of early adopters, and how potential buyers and leasers can be identified and incentivized.—Tran et al.
Martino Tran and his colleagues reviewed the literature on electric vehicles, with a focus on market diffusion of full battery electric vehicles (BEVs). They drew mostly on evidence from Western Europe and North America. In their review, they assessed the key interactions between technology and behavior across different scales: system level, local level and consumer adoption.
System-level implications include the decarbonization of the grid and the addition of additional generation capacity. Although in theory electrifying transportation can achieve deep cuts in CO2 emissions, in practice, BEV deployment will be ineffective with high-carbon electricity. Decisions about the nature of electricity generation must be made within the next 10 years if those new deployments are to align with the next two to three vehicle-fleet cycles in which large-scale commercialization of BEVs is expected, the authors note, adding:
The scale of that challenge has not been fully appreciated in the policy discussion.
There is also some uncertainty over whether high BEV penetrations will require additional electricity generation capacity, and if so, over what period. Over the sort- to medium-terms, studies in the US and UK suggest that additional capacity will not be required.
However, predicting the need for additional capacity over the long term (until 2050 and beyond) is far less certain and will depend on the future grid mix and the degree of interaction with other sectors. Under a carbon-constrained scenario with high wind-power penetrations, more installed capacity would be required to meet electricity demand relative to a business-as-usual grid mix reliant on coal or nuclear.—Tran et al.
Local-level implications include charging regimes; the purpose of trips; range anxiety; and battery performance and acceptance.
Consumer adoption behavior comprises willingness to pay, education, and social norms. Despite the results of some surveys that imply that large percentages of consumers could be incentivized to adopt BEVs, other results suggest that BEVs would have to be cost-competitive with internal combustion engine vehicles to trigger widespread adoption.
The lack of willingness to pay suggests that many consumers are poorly informed over the cost savings of BEVs and the causal link between fuel efficiency and CO2 emissions, the authors note. “This suggests that there are important market failures in consumer decision-making about fuel economy.”
...Empirical and theoretical work on innovation diffusion and environmental behaviour shows that consumers are influenced by their social groups and willing to comply with their norms. These findings indicate that government and industry need to more effectively communicate how BEVs can address both the financial concerns and social aspirations of potential adopters. There is scope for policy to be informed by new understanding of how information and innovations spread through social networks to identify potential adopters, and increase exposure, familiarity and knowledge about the benefits of BEVs.—Tran et al.
Martino Tran, David Banister, Justin D. K. Bishop & Malcolm D. McCulloch (2012) Realizing the electric-vehicle revolution. Nature Climate Change 2, 328–333 doi: 10.1038/nclimate1429
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