The role of the government and automotive industry in electric vehicle adoption : french case

Abstract

In the 21st century much effort has been done on a global level to turn away from our traditional energy sources. A myriad of reports expressed their concerns about the disastrous direction our climate is evolving to. Scientists agree that the environment should be better taken care of and governments and industries have answered the call. A new industrial revolution has been born, in which humanity hopes to satisfy its energy needs while keeping the climate intact. Consequently, green energy has become an established technology that‟s been used all over the world. Electric vehicles could be the key to success in replacing all of our electricity generation facilities by greener and more sustainable alternatives. If everyone would drive an electric vehicle (EV) there would be (1) no more direct pollution from transport and (2) the electricity storage capacity would be sufficient to comply to the requirements to negate intermittency of green energy. Via the vehicle-to-grid (V2G) technology in combination with solar panels or other micro-scale energy sources the storage capacity of EVs can also serve consumers to actually become suppliers themselves by interconnecting the energy network which would increase the overall efficiency and reliability. Even though EVs have such high potential for societies, the success is highly dependent on the level of penetration. At this point, Norway is the only country that has attained a 1% share of EVs in the total vehicle fleet. In spite of France, the country of focus in this study, having the most advanced EV market within Europe (Scandanavian countries excluded), this study reveals that there is still room for improvement. The present research aims first of all to unveil which factors influence the EV adoption and analyses the details of their interaction. This raises the following questions: Does a relationship exist between market variables and EV adoption and can these variables be adjusted in order to stimulate the EV sales in order to improve the society? More specifically, the variables that will be considered are:  Relative price of the EV compared to ICE vehicles  Relative O&M costs of the EV compared to ICE vehicles  Electric range of the EV  Installed charging infrastructure  Financial support provided by the government  Share of EVs in the total vehicle fleet In addition to analyzing the impact of these variables on the sales of EV, this study investigates possibilities to enhance the EV sales and to optimize overhead expenses by the government (or investment by the automotive industry) towards the goal of a higher EV penetration. Not just price, but also range and vehicle efficiency make a difference to consumers. The challenge for car manufacturers lies in decreasing the price while simultaneously increasing the battery strength to obtain a higher range and increasing the efficiency for a lower fuel cost for the user. In addition, government support in the form of subsidies and tax benefits plays a significant role in the EV sales. The automotive industry depends on high production numbers and research in new technologies if it wants to adjust the aforementioned factors . While the auto industry focuses on increasing vehicle features, the government can grant financial support to those who already want to buy an EV. This approach will be beneficial for all parties. Furthermore, the results of this study will show that it is too early to make a proper conclusion on the influence of existing charging infrastructure. Two reasons are the small penetration level of charging facilities so far and the possibility that the range of this study is too short to draw conclusions on the infrastructure. A report of the OECD foresees a large increase in installed charging facilities in the next decennia (Lucchese et al., 2012). Therefore, future research will be able to determine the impact of charging infrastructure on the EV sales. That said, the conclusions of this study are certainly applicable to any country wishing to take pro-EV measures. Finally, besides the role of the government and the corporate world, the level of acceptance of EVs among consumers is still low. This conclusion has been drawn from previous qualitative studies, and confirmed by quantitative data (Young, 2014). The EV share of the total vehicle fleet proved to be negatively related to EV adoption and the only possible reason is the lack of consumers that are being won over to the EV case. The more EVs sold in the past, the less vehicles are being sold now so the amount of potential buyers does not increase enough to support a continuous growth of the EV market. This research was based on the French case, There are numerous traditional car manufacturers that might benefit from a slower transitioning of the vehicle fleet so they can easier adapt, but even then the fact remains that all parties, including consumers, will have to contribute if we want to take this step to a sustainable future.