Take away 3 points
- Legislative changes in key automotive markets lead to the continuous removal of hard barriers to electromobility.
- Most significant soft barriers to converting to electric fleets are related to employees’ lack of knowledge and experience with electric vehicles.
- Poolcar solutions that include electric vehicles and allow employees to use them before their widespread adoption will allow for a smooth fleet conversion.
Hard & Soft Barriers
Electric mobility has become a critical area in delivering environmentally sustainable solutions. However, its widespread implementation is continuously facing challenges. Electromobility is developing in a system shaped by technology as well as by its users and their attitudes and behaviors towards this innovation. Although still a significant limiting factor, hard barriers, such as inadequate or insufficient infrastructure, are being progressively dealt with by governments and businesses. Soft barriers, such as attitudes towards electric mobility, emerge as a growing concern in introducing electric vehicles to company fleets. Understanding the concerns of the employees towards electric mobility and addressing these correctly will be critical to successfully introducing innovation in company car management.
Introducing electric mobility alternatives to the corporate fleet is not a straightforward process. Internal combustion engine vehicles rely on proven technologies and enjoy common public acceptance for their use. There is reliable infrastructure in place, as are global supply chains, and established government policies and standards. Therefore, the adoption of electric vehicles is still slow despite growing interest levels in electromobility in key consumer markets such as Germany, China, Japan, and the US. The European Union is at the forefront in legislative changes fostering the development of electric mobility. There is currently a maximal emission standard set at 95 g per kilometer for passenger cars in effect from 2021. There are also plans to halve the number of conventionally propelled cars in urban transport by 2030 and eliminate them from cities by 2050. By 2035, all new vehicles sold in the union are to be battery electric vehicles. To incentivize electric mobility, the German federal government has recently increased its electric vehicle purchase subsidy from 4,000 EUR in 2019 to 6,000 EUR in 2020 and in effect until 2025. Other measures include exempting electric vehicles from congestion reduction policies in major cities (e.g., restrictions on cars entering downtown areas), as is the case in China. Governmental,technological, and infrastructural developments are clearly conducive to the advance of electric vehicles, but consumer concerns about electromobility appear to be a barrier to their widespread adoption.
Role of the Corporate customer
Corporate fleets are likely to lead the way in adopting electric mobility. Businesses have a higher rate of vehicle acquisition than private owners (64% of newly registered cars in Germany are company vehicles), use cars more intensively, and have better potential to overcome infrastructural barriers. Most of the companies have an electrification strategy and have already, marginally,implemented a few electric vehicles in their fleets. The same companies expect the share of EVs to exceed 30% by 2025, which – taking into account a 3.5 year renewal cycle – means that EV policies, charging infrastructure installations and sourcing activities will be kicking off before the end of 2022 . Studies suggest that companies are driven by a number of various factors in introducing electric vehicles to their fleets. Reducing CO2 emissions and noise levels are some of the most often mentioned environmental factors, while lower fuel and operational costs are mentioned as the most important economic aspects  . Promoting the company’s image as an environmentally friendly organization is also a significant motivator. At the same time, businesses are aware of the barriers limiting the introduction of electric vehicles to their fleets. Studies mention lack of charging infrastructure and high investment costs as some of the most distinct hard barriers. Other research indicates lack of knowledge about electric vehicles, lack of experience in using them, and limited trust in innovative technologies as the most critical soft barriers to introducing electromobility to their organizations. Therefore, it is crucial for companies to understand how to foster and manage change in their employees’ mobility behavior.
Introducing change to an organization is always a challenging task. Particularly when it questions long- standing practices and employee habits, and concerns something as personal as the company car. However, taking into account the environmental, economic, and social considerations, a transition to corporate fleets based on electric vehicles is inevitable. While hard barriers are being addressed by appropriate policy making and technological development, businesses will have to address soft barriers themselves. Attitudes towards electromobility will vary and there is no one size fits all solution. Identifying the concerns and perspectives of employees towards using electric vehicles will be key to successfully introducing electric mobility solutions in an organization. A number of studies on consumer behavior in the context of new technology adoption have confirmed the role of attitude as a key variable in predicting intention to use. The available data shows that acceptance-related soft barriers and scant demand from employees are one the key issues to be addressed. Issues such as a lack of trust,information, and knowledge, and the perception of the ease of use of electric vehicles emerge as the most important challenges to overcome.
A recent online survey conducted among Swiss fleet managers shows that 63 percent of them consider lack of knowledge as an important or very important factor hindering the acceptance of electric vehicles in the company fleet, and 56 percent believe that there is insufficient demand from employees .
Another study conducted in Spain suggests that perceived value, defined as an overall assessment of the usefulness of a product based on the consumer’s, has a direct impact on people’s intention to use electric vehicles . Results indicate that potential users of electric mobility are influenced primarily by emotions and the experience of driving an electric car, and that test driving is an important factor in overcoming consumer’s reluctance to use them. This is coherent with the finding of another Swiss study investigating the role of experience in driving an electric vehicle in rising acceptance rates. During a campaign delivered in St. Gaalen corporate users could test drive electric vehicles in the normal course of business life free of charge and without obligation. The electric vehicle was delivered to the company and its functionality was explained to the passengers: the company and thus the drivers could then test the electric vehicle every day for a week. As a result of the campaign acceptance levels rose significantly in all researched categories,particularly those related to soft barriers, most importantly in “Ease of use/usefulness” and “enthusiasm”. Based on these results, we can expect that soft barriers to introducing electromobility can be overcome by allowing employees to experience it beforehand. Therefore, pool car solutions allowing users to experience electric vehicles will be key to their widespread introduction to corporate fleets.
Summing up, the importance of electromobility will continue to rise due to its environmental and social significance.Legislative changes in key automotive markets will continue to trigger the removal of hard barriers to the widespread adoption of electric vehicles. Since businesses are most likely to lead this process, they will have to remove soft barriers within the organizations. Data obtained from various studies suggest that an individual approach will most likely be key in facilitating the process. Acceptance of electric vehicles in the corporate fleet will depend on the employees' possibility to experience them before their widespread adoption.Pool car solutions that include electric vehicles and allow employees to test them will allow for faster and smoother conversion to an electric fleet.
- Vuichard, P., 2021. Electrifying the company car: Identifying hard and soft barriers among fleet managers in Switzerland. Energy Research & Social Science, 77,p.102098.
- Higueras-Castillo, E., Molinillo,S., Coca-Stefaniak, J.A. and Liébana-Cabanillas, F., 2019. Perceived value and customer adoption of electric and hybrid vehicles. Sustainability, 11(18),p.4956.
- Global Fleet Survey 2020, Global Fleet. Link