Markets and Policy Measures in the Evolution of Electric Mobility

In the idea contest for technological solutions, cost-efficient processes and customer-oriented mobility services for the usage of electric mobility the phase of a realistic estimation concerning the threats and opportunities can be identified with the help of the hype cycle. Therefore, the research question arises about the steps which lead towards the slope of enlightenment. In this regard, the paper intends to discuss the questions in the following categories for getting an extensive overview: How did the market structures change? How did the business models change? How will the service strategies change? As a result, the paper contributes to the research about future concepts of mobility by providing an overview of different strategic perspectives.

Different field trials and corresponding acceptance studies with new technologies were carried out between 2010 and 2013 at the Chair of Energy Economics at the Karlsruhe Institute of Technology (KIT). Those involved Electric Vehicle (EV) users, Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG) vehicle users as well as persons with strong interest in EV and smart energy home technologies. In order to characterize early adopters the same item-sets concerning attitudes regarding climate change, prices and innovations as well as corresponding socio-demographic characteristics were used throughout all these studies. Survey datasets originating from these studies are joined to be analyzed together. Regression methods are applied in order to characterize early EV adopters based on a subsample of EV company car users in the French-German context. A binary logistic regression model explaining private EV purchase intentions is developed. According to this model, early private EV adopters are likely to have a higher level of income, to have a household equipped with two or more cars and to travel more than 50 km a day, not necessarily by car. This model additionally shows that possibilities to experience EV (e.g. by test drives) are important leverages to support adoption of EV by private car buyers. Respondents who already decided to privately purchase an EV show significantly lower general price sensitivities than the LPG and CNG vehicle users.

Both in public and scientific discussion, electric cars are claimed to suit as company cars (Rother and Eisert 2013). Particularly larger fleets may allow for the application of diversified carriers and within others of short distance vehicles. Here electric cars seem to fit. Due to increasing pressure on companies to save carbon dioxide, interest in alternative drive technologies has increased. Recent surveys however indicate that companies particularly base acquisition decisions on budget and image criteria (Holzer 2012). Since the electric car is neither known to be cheap, even from a Total Cost of Ownership (TCO) point of view (Nationale Plattform Elektromobilität 2011), nor particularly fancy (exceptions like Tesla’s famous sports cars aside) initial interest in the technology in many cases doesn’t materialize. The paper therefore explores ways to increase the attractiveness of electric cars. Services provide benefits; their targeted design in order to increase economic payoff is however crucial. The paper therefore first analyzes promising applications of the electric car within company fleets, which are then aggregated to five key purchase motives. It then elaborates service concepts tackling image and TCO issues of the electric car. Discussion of added value reveals potential for the successful integration of electric cars into corporate fleets and includes several best practice examples.

Electric mobility is a key to a sustainable, climate and environmentally friendly mobility. However, in terms of electrically operated cars it has not spread to the full extent of its potential. From the user’s perspective there are two major barriers in buying an electric car: it costs more than a car with an internal combustion engine and also, it has in general a limited range compared to a conventional vehicle. Carsharing with electric vehicles is one promising solution to balance the mentioned high costs and the lack of range: Firstly, the total costs of ownership can be spread among many users and secondly, as a part of the public transport system it can offer a complement for local and long-distance travel. To validate that especially flexible carsharing services with electric cars are suitable in spreading electric mobility, the paper presents a study which was carried out in the city of Berlin comprising several surveys. Expectations and experiences of users with a flexible carsharing offer including exclusively electric vehicles were evaluated and analysed over a period of 1 year. Overall, the results show that most users of flexible e-carsharing have no problem with the specific characteristics of the electric vehicles. Driving range and charging are generally not a limiting factor. For the majority of the users the “e”-component is even a reason to use the offer. Thus, flexible e-carsharing seems to be a good concept to spread electric mobility.

Large sums of public funding are provided to promote research, development and demonstration projects related to electric mobility. Especially collaborative projects are funded due to the assumption that cooperation enhances innovation. However, there is the risk of government failure. Therefore, public measures have to be evaluated and, if necessary, be adjusted. In a qualitative survey with different organizations involved in the innovation system of e-mobility, impediments as well as proposals for improvement were identified. The study focused on cooperative behavior, demonstrating that political measures have a great impact on it.

In 2010, the Chinese government initiated a leapfrogging strategy to jump-start technological upgrading in the country’s automobile industry and facilitate the transition to electric mobility based largely on indigenous innovation. This move was driven by escalating environmental pressures as well as resource constraints and inspired by the prospect of greatly strengthening the technological capabilities and competitive positions of domestic automobile manufacturers. The aim was to establish an early lead in the field of electric vehicles featuring high electric power ratios and power grid connectivity. The paper identifies this leapfrogging attempt as a strategic project initiated by the central government and organized in a top down manner. It sheds light on the supporting public policy framework and conducts a preliminary review of the strategy’s accomplishments until mid-2012. By way of an in-depth examination of guidance policies and incentive structures, the paper highlights the challenge of coordinating promotion plans across the country.

Nowadays, for many reasons, the transformation of individual mobility behavior seems crucial. There is a consensus among scientists that in time we will run out of fossil fuel. Secondly, in order to at least slow down climate change, pollution of the environment has to be minimized. In addition to these ecological aspects, city centers and urban areas are running out of space in the face of increasing individualized traffic. On the other hand, individual mobility is a crucial factor to enable social participation and integration. Not being mobile often means living on the fringe of society. From an economic point of view, the mobility sector needs to be competitive on a global level but with lower energy use. From the point of view of the customer finally, mobility must be affordable. This contribution focusses on electric cars, on car sharing, and on intermodal services as possible ways of reducing emissions, decreasing the number of cars and overcoming the problem of insufficient space without at the same time increasing social inequality and threatening economic competitiveness. In an ongoing research project, the role of organizations as change agents towards sustainable mobility is being explored. By offering electric vehicles to their employees or tenants, organizations, as employers or landlords, seem to be important actors regarding a successful implementation and diffusion of new modes of mobility. Using a mixture of empirical methods, the project has traced implementation processes of e-fleets in different kinds of organizations and identified different types of promoters from within the organizations as well as structural and institutional barriers to these drivers of change. The preliminary findings allow deeper understanding of how organizations understand their roles in a transformation process towards new modes of (sustainable) mobility, but they also indicate some of the problems that still exist.

In the past, cooperation in the automotive industry was observed particularly in the vertical dimension of the value chain. Presently, an increasingly strong trend towards cooperation on the horizontal level and thus between direct competitors is emerging. The large number of examples in the automotive supply industry shows that automotive suppliers are trying to combine resources and competencies with direct competitors to gain competitive advantages. In this context coopetition occurs, i.e. the simultaneity of cooperation and competition between at least two companies. One of the main conflicts of coopetition is the emergence of opportunism among the participating parties, which represents one of the greatest threats to successful partnerships in the automotive industry. Conversely, opportunism is required for competition and thereby for the generation of competitive advantages for at least one side of the cooperation. Thus, the consideration of opportunism plays an important role in coopetitive situations, because a distinct (weak) opportunism exerts a positive (negative) influence on competitive behavior, affecting at the same time negatively (positively) on cooperative activities. In the course of coopetition the challenge to ensure a balance of opportunistic behaviors between cooperative and competitive actions becomes crucial. Against this background, the present article analyses the process and the effectiveness of various organizational measures to balance opportunistic behavior in coopetitive situations in the context of the automotive supply industry. In a first step, various organizational measures of the transaction costs, the principal-agent and social exchange theory were extracted. In a second step, ten German automotive suppliers have been examined during coopetitive situations by means of a case study analysis, in order to test the process, the efficiency and the effectiveness of the theoretically derived measures. Our analysis shows that widespread measures in the literature, such as formal contracts or contract-based sanctions, are inefficient and ineffective to balance opportunistic behavior. In contrast, measures which ensure a context of cooperative and competitive activities e.g. social norms and values as well as specific investment and mutual equity investments, are more promising to put opportunism in coopetitive situations into balance.

In order to promote the market-introduction phase of electric mobility, car manufacturers will have to face the residual value risk of electric cars for consumers, particularly concerning the battery. An increasingly common trend to minimize uncertainties for the consumer, is the separate leasing of the battery. In this paper we examine degradation in lithium-ion batteries from a lessor’s perspective. We suppose that battery life can be influenced directly by the user. In the case of a lease contract, the battery always remains the property of the lessor. In this respect, there are no direct incentives for the user to increase battery life by expending additional effort. Therefore, we discuss the idea of a dynamic leasing concept as an opportunity for car manufacturers to encourage consumers to adopt a gentle treatment of the battery in order to extend battery lifetime and thus the residual value. Therefore, we examine the effects of different charging strategies on a battery’s residual value to verify whether there is potential for a deeper investigation of a dynamic battery leasing approach. In order to quantify the extent of user influence on battery life, lifetime simulations are performed for different charging scenarios. For our calculations we use a degradation model as a function of the depth of discharge. Furthermore, realistic driving patterns are taken into account to estimate the quantity of energy processed as a function of use mode.

In this paper 969 commercial fleets in the City of Hamburg, Germany, are analysed to investigate the influence of organisational parameters, like vehicle use, as well as structural parameters, such as vehicle types and fleet size, on the potential of battery electric vehicles to substitute conventional ones. The evaluation of the 8,466 reported vehicles shows a theoretical substitution potential, as 90 % of the reported vehicles were below 3.5 tonnes gross vehicle mass and 75 % were used for trips below 140 km a day as the number of the average maximum range of those BEVs available in the market. For those occasions where the range of a BEV will not suffice, alternative mobility options or transport modes still seem a prerequisite for the deployment of BEVs, especially since 70 % of the investigated fleets had no more than four vehicles and little vehicle redundancy. But, 48 % of the companies do also use other transport modes during working hours such as public transport or bicycles. In addition, vehicle replacement cycles proved to be another influential structural parameter. It is dictating the possible rate of penetration of BEVs in the fleets and limiting the substitution potential of the investigated fleets to 40 % over the next 3 years.

This paper examines the conditions of global dominant innovation design considering e-mobility and the emergence of the lead market in different countries. The development of lead markets is linked to multiple, country-specific factors, which influence the lead market potential and position through the decreasing of national differences over time by benefits of the best compromise of an internationally similar innovation design. Due an early market entry, firms can reach first mover advantages, which they have to protect against followers. Especially eco-innovations could reach a state of a global dominant design, because they are developed to tackle the climate change. The development of globally sold e-mobility products, e.g. the electric motor, the battery or the whole vehicle is more likely. Therefore, the strategy to strengthen a lead market for e-mobility seems to be promising. With the help of a principal component analysis (PCA), different country-specific indicators were applied in the model of five lead market factors. But lead markets change quickly and the given theoretical concept is only estimating opportunities and not forecasting technology developments. After the evaluation the USA obtain the 1st lead market position according to e-mobility, followed by Germany and France. The advantage of the USA is mainly a result of demand incentives and a large sales market. In Germany supply side indicators are more pronounced. The position of France mainly results from well advanced supply and demand side measures in average.