The KiM Netherlands Institute for Transport Policy Analysis published a new report on electric LCV’s. Approximately 876,000 delivery vans were driving around the Netherlands in 2016, of which the majority were diesel-powered delivery vans.
However, very few companies have taken the step towards electric vans: as of early 2018, only 2,300 electric delivery vans were in use in the Netherlands, constituting a market share of just 0.3 percent. Companies have thus far reacted hesitantly to the possibility of purchasing electric delivery vans.
Stimulating sales and use
The KiM Netherlands Institute for Transport Policy Analysis researched policy options available for encouraging companies to purchase and deploy electric delivery vans. The research is based on a literature review, interviews, a meeting with experts in the field, and a delivery van survey conducted by Statistics Netherlands in 2016.
Everett Rogers’ ‘diffusion of innovations’ theory served as their theoretical framework. Rogers states that innovation occurs in numerous stages and among various user groups (innovators, early adopters, early majority, late majority and laggards). A product will ultimately only achieve widespread success if large user groups deem the new product – in this case electric delivery vans – to be an improvement on the previous situation (vans powered by gasoline or diesel). Rogers moreover emphasized the financial aspect, as well as other factors, including the status that can be derived from the innovation. And this not only involves financial considerations, but also psychological and societal factors.
Situational, psychological and societal considerations
KiM examined the various arguments that a play role in the purchase and use of electric vehicles: situational, psychological and societal.
For the situational factors, they account for the total cost of ownership (the TCO), the radius of action and the availability of electric delivery vans. Are companies hesitant to purchase electric vehicles because of their higher purchase prices? This could very well be a reason why companies remain reluctant. Financial considerations are key factors in companies’ selection processes. For many companies, comprehensive business cases are a prerequisite.
Electric delivery vans currently on the market are indeed more expensive than conventional delivery vans. However, considering the total costs, the TCO, electric vans do not score badly at all, which is partly owing to subsidies. In many cases an electric delivery van’s TCO is equal to that of a conventional delivery van. International studies have also revealed that the TCO for small electric delivery vans nearly reaches or has already reached the break-even point for diesel-powered delivery vans. Companies may be unaware of this fact or other non-financial obstacles may exist.
Are companies hesitant because of the currently limited radius of action? The radius of action for electric delivery vans is currently approximately 170 kilometres, after which they must be recharged. Based on data from Statistics Netherlands KiM assumes with certain qualifications that many companies will remain (well) below this limit.
Based on the current technology, the replacement potential is roughly estimated as 10 to 25%. There is certainly considerable room for growth. Moreover, this potential could be further enhanced by future technological improvements to battery capacity and charging speeds.
A third situational factor is more problematic: the current supply of electric delivery vans is limited. Not all car brands offer electric delivery vans in their portfolios, and the ones offered are primarily the small delivery vans, the so-called ‘two-seaters’. This situation is expected to change in the coming years, however.
Psychological considerations include brand loyalty and user experience. Sales are restricted because the supply of electric delivery vans remains limited. To date the Dutch market is dominated by the Nissan E-NV200 and Renault Kangoo Express. Many companies are inclined to remain loyal to their current brands like Volkswagen and Mercedes.
Try or die?
User experience can have a positive impact. When people are given the opportunity to test-drive or use electric delivery vans for extended periods of time, they are more positive in their assessments of electric driving. And such practical experience als learns them how to cope with ‘range anxiety’, which is the fear of failing to reach one’s destination due to an empty battery and planning challenges. The report did not look at other options, like light electric vehicles or innovative logistics concepts whereby vans are no longer needed.
Electric driving must moreover correspond to a company’s core beliefs, values and norms. Most companies make reasoned choices when purchasing company vehicles, and (total) costs are a key factor. A characteristic of the first group of pioneering users is that their reasons for purchasing electric delivery vans are not motivated by financial considerations but rather symbolic ones, such as status, image and environmental awareness. Electric vehicles allow companies to show that they are not only committed to sustainability but also willing to pay (extra) for it, while accepting the associated hassle. Electric delivery vans convey a ‘green’ and innovative image, which can be emphasised by exterior logos and inscriptions.
In addition to situational and psychological considerations, societal factors also play a role. Innovations are spread through social processes. Individuals and companies do not exist in social vacuums, but rather observe what others do. When ‘most people’ make a certain choice, this is deemed as social proof that it is the right choice.
It can therefore be prudent to inform companies about the increasing numbers of electric delivery vans. Role models – including governmental services and local family businesses that use electric delivery vans – can have a positive impact. Additionally, a ‘neighbourhood effect’ can emerge, whereby people are more likely to purchase a non-conventional car if their neighbours also own one. Such an effect could occur as electric vans become increasingly visible in the streets, shopping areas and business parks.
Policy options
Innovations need time to evolve into fully-fledged products. Effective policy takes into account the various stages of the innovation process and the underlying motives therein. Policy could benefit from focusing in the early stages on the innovators’ motives. Subsequently, as the product gains more users, the policy can be adjusted.
The KiM report provides an overview of some 20 policy options, as based on the range of situational, psychological and societal considerations. Adaptive policy is advised, given this sector’s considerable dynamism and prevailing uncertainties (that purchase prices, radius of action and amount of models on the market are subject to change), and also because the innovation process is comprised of varying stages and different groups of users.
The English summary can be found at the end of the KiM report.