Global Consumer Behavior In the Electric Vehicle Market

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As a California resident, it is difficult not to notice the Tesla Supercharger stations on Highway 5 as well as electric vehicle charging stations at supermarkets and university parking lots. Although gas prices are currently low, Californian consumers still seem interested in purchasing hybrid and electric vehicles (EV). During my travels abroad, I also noticed electrical buses in Vienna as well as Tesla Vehicles on German highways. Due to my observations, I wondered whether consumer behavior is becoming increasingly environmentally conscious around the world or if it is mainly due to government incentives. I wanted to understand what influenced consumer behavior in the EV market in the US versus in Europe.

(Ebus in Vienna, Austria)

(Tesla Supercharger station)

According to an Ipsos global poll, 75% of Germans, 91% of Chinese and 57% of Americans believe we must change our habits quickly in order to mitigate climate change and environmental damage. These statistics match well with the International Energy Agency’s report in 2015. They reported that, “the year of 2015 saw the global threshold of 1 million electric cars on the road exceeded, closing at 1.26 million.” (IEA, pg. 4) (Figure 1) The electric car market also expanded in seven countries above 1%: China, the United Kingdom, Norway, the Netherlands, Sweden, Denmark and France. However, the report concluded it was due to government policies and incentives. They also concluded that in order for the electric vehicle car market to expand, further policy support is required.

Therefore consumers behavior in the US and abroad are mostly influenced by government incentives in the electric vehicle market. Despite my observations, the electric vehicle market did not sustain growth in the US in 2015 as well as in Japan. The Ipsos global poll shows that Japanese and Americans consumers are less concerned for the environment than French consumers (where the EV market grew above 1%).  65% of Americans and 45% of Japanese agree that Companies do not pay enough attention to the environment, while 78% of French consumers believe companies do not pay enough attention. (Mori) Therefore there could possibly be a correlation between the EV market and consumer behavior towards the environment.

The study continues to report that “financial incentives and the availability of charging infrastructure emerged as factors that were positively correlated with the growth of electric vehicle market shares.” (IEA, pg.11) For example, Norway provides strong incentives for consumers to purchase electric vehicles by giving them tax exemptions, waivers on road tolls and access to the city bus lanes. (IEA, pg.11) France and China also give strong incentives to consumers. China gives tax expemtions and France offers purchase incentives of 6,300 euros for cars emitting,”less than 20 grammes of CO2 per kilometre.” (IEA, pg.14)  Although incentives are correlated with the growth of the electric vehicle car market, consumer behavior toward the environment may influence the EV market as well.

I was not surprised that the electric vehicle car market is growing rapidly in China. Due to a growing middle class and urbanization, the Chinese government must adopt environmentally friendly transportation methods in order to improve air quality and living standards. Additionally, according to the Ipsos poll, 93% of Chinese believe companies do not pay enough attention to the environment. (Mori) Therefore Chinese consumers are environmentaly conscious and it may correlate with a growing EV market.

Barriers of purchasing electrical vehicles, such as  high costs and lack of confidence in new technology also can influence consumer behavior. If I were to purchase an electric vehicle, I would also feel nervous about locating charging stations and adapting to unfaimilar technology. However, The IEA reports that battery costs will continue to decrease and the electric vehicle market should continue to grow over the new years. (figure 2)

There is also a growing awareness of electric vehicles in the US. The National Renewable Energy Laboratory published a study of the US population that showed that 24% of respondents stated they would consider purchasing a hybrid vehicle, while 20% stated they would consider purchasing an electric vehicle. 48% were also able to, “name a specific plug-in electric vehicle make and model.” (Singer) Consumers in the US and abroad seems environmentally conscious and have an awareness of the electric vehicle market. However, it seems that in order to truly influence consumer behavior in the US and abroad, government policy plays a huge role in the electric vehicle market.

Sources:

Mori, Ipsos. “Environment.” Global Trends Survey | Environment. N.p., n.d. Web. 06 Feb. 2017. <http://www.ipsosglobaltrends.com/environment.html>.

“Global EV Outlook 2016 Beyond One Million Electric Cars.” (2016): 1-29. International Energy Agency. International Energy Agency, 2016. Web. 2 Feb. 2016. <https://www.iea.org/publications/freepublications/publication/Global_EV_Outlook_2016.pdf>.

Singer, Mark. “Consumer Views on Plug-in Electric Vehicles — National Benchmark Report.” (2016): n. pag. National Renewable Energy Labroatory, 2016. Web. <http://www.afdc.energy.gov/uploads/publication/consumer_views_pev_benchmark.pdf>.

 

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