Drivers and challenges of electric vehicles integration in corporate fleet: An empirical survey
Introduction
Following the international treaty on climate change adopted by 196 parties in Paris, governments worldwide have pledged to act against climate warming. For example, the European Union has committed to reducing its total emissions to at least 40% below 1990 levels by 2030 and to reducing transport emissions by more than 60% by 2050. Given the challenges facing the path to decarbonization, the environmental performance of the transport sector must improve soundly considering that this sector is responsible for more than a quarter of the carbon emissions from fuel combustion. Given that the demand for mobility will continue to grow in the coming decades, measures are required in the short term as fossil fuels currently cover 92% of the sector's needs (Santos, 2017). Although several initiatives have been initiated worldwide to promote electric mobility, several challenges persist; in this respect, a recent paper predicts that in the next two decades, electric vehicles (EVs) will account for a share of between 11% and 28% of the global road transport fleet (Kapustin & Grushevenko, 2020). It is understood that the share of EVs will depend on industry investments in vehicles and infrastructure and on organizations that add EVs to their fleets (Vehmas, Kaivo-oja, & Luukkanen, 2018). In this respect, significant benefits for industry, customers, and society from investments in EVs (Dillon, Hagerman, Swartout, & Engel, 2020) have been identified, such as a reduction in local emissions.
Although the literature abounds in articles related to the impact of electric mobility on transport sector sustainability (Baptista, Melo, & Rolim, 2014; Hawkins, Singh, Majeau-Bettez, & Strømman, 2013; Seign, Schüßler, & Bogenberger, 2015), the role that corporate fleets play in decarbonization deserves more attention because vehicle fleets are one of the largest sources of greenhouse gas emissions for many companies. This is particularly true due to the increasing number of corporate vehicles, the incentive for private purchase that employees' exposure to EVs within fleets represents, and the technology developments that contribute to cutting costs.
Fleet managers carry out management activities related to the fleet owned by an organization, in which vehicle-related costs can account for a significant proportion of costs. Indeed, in the increasingly complex business arena, fleet managers work closely with other key departments to support the organizations' strategy for sustainability. However, although corporate fleets are considered early adopters of EVs (Sierzchula, 2014), their electrification course remains slow. This is partly due to obstacles typical to EV adoption, such as range anxiety, limited infrastructure, and availability of models (Globisch, Dütschke, & Schleich, 2018; Li, Long, Chen, & Geng, 2017).
Within corporate greening strategies, fleet managers are increasingly included in the decision-making process aimed at implementing electric fleets. Decision-making based on imperfect information is however risky because it increases the likelihood of strategic slip-ups. Indeed, in dynamic industries, fleet managers must make the right strategic choices while additionally performing their main activities and looking to the future of the market they operate in (Giones, Brem, & Berger, 2019). This article focuses on the role that information plays in decision-making regarding EV adoption, particularly the prominent role of technical understanding and economic awareness. Technical understanding refers to technical knowledge concerning three types of EVs: battery EVs, plug-in hybrid EVs, and hybrid EVs, while economic awareness represents the expectations in terms of payback on, investments given that fleet managers are usually responsible for strategic planning.
It is argued that the combination of fleet managers' commitment to increasing the share of EVs in the fleets they manage, and effective policymaking, can bring about socioeconomic and environmental benefits (Yokessa & Marette, 2019). Indeed, according to the International Council on Clean Transportation, there is a causal link between the increase of EVs in fleets and the increase in EV adoption by citizens (Jin & Slowik, 2017). This causal link derives from the fact that fleets directly provide potential buyers significant exposure to these vehicles, thus representing an opportunity to try out such vehicles during work.
Previous research has shown that market failure hinders investment in sustainable technology (Egnér & Trosvik, 2018). Other market contributing to market failure include the gap between the expected and actual payback period, imperfect technical information and knowledge, ineffectiveness of incentives, limited economies of scale, and compromise between investments for efficient energy and other priorities (IEA, 2017). This article pays particular attention to the need to overcome the misalignment between expected and actual payback time and the need to enhance understanding of vehicles' technical characteristics.
The analyses in this paper were based on a survey through which empirical data were gathered via a five-month research project involving the participation of 293 fleet managers who filled out an online questionnaire. A survey of 364 UK-based commercial and public sector fleet buyers was completed with the aim of identifying personal and organizational factors that might encourage fleet managers to purchase EVs.
The remainder of this paper is organized as follows: Section 2 reviews the main research topics considered in this article. Section 3 presents the research design, and Section 4 outlines the main results, which are discussed in Section 5. Conclusions follow in Section 6.
Section snippets
Literature
The need for transport decarbonization has prompted new business opportunities; in this respect, previous literature on business models has highlighted ways in which competitive advantage may be safeguarded by creating new businesses or by reorganizing existing ones (Budde Christensen, Wells, & Cipcigan, 2012). In the current economic context, companies face the challenge of transforming sustainability into a source of economic value creation given that appropriate business models bring
Research design and data
The design of this study comprises a survey preceded by face-to-face in-depth interviews of members of a panel to design the questionnaire. The target respondents were professionals in fleet management, who were surveyed to learn more about EV integration in corporate fleets. The analyses in this paper were based on data gathered via a five-month research project with the participation of 293 fleet managers who filled out an online questionnaire. A similar sample and research goal can be found
Results
This section outlines the notable results that are useful for answering the research questions. The results suggest a lack of information and awareness regarding EVs in terms of technical characteristics, given that 59% of the fleet managers surveyed scored low to medium. Furthermore, the findings indicate a misalignment related to the expected investment payback period, considering that 49% declared that they expect a payback period of under three years.
The concept of relative advantage
Discussion
The results of this study reveal that the higher the number of corporate EVs, the higher the sales and usage by drivers who may otherwise not have had any knowledge of, or previous exposure to, EVs. Through these findings, this article strengthens knowledge on fleet managers' propensity towards EV adoption. In particular, 80% of fleet managers indicated that they would be willing to integrate electric cars into their fleets if they were offered tax incentives and partnerships with recharging
Conclusions
A promising way to reduce carbon emissions from transport is to increase the share of electric mobility and integrate it into the energy system, with an increasing proportion of renewable energy sources. Considering that companies will use different mechanisms to implement a sustainable fleet management strategy, a comprehensive green fleet management strategy must focus on the prioritization of EVs while investing in fleet managers' training on EVs technologies and economic issues. Indeed, the
Author statement
I declare I was the only author of this paper.
Declaration of Competing Interest
None.
Acknowledgements
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
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2022, Research in Transportation Business and ManagementCitation Excerpt :Hence, huge investments and policy implications were proposed by the government across the globe (Du, Ouyang, & Chen, 2017), consequently, many countries have introduced electric vehicles and predicted the increased market shares of EVs (Bakker & Trip, 2013). However, a study conducted by Di Foggia (2021) found that the lack of technical know-how restrains fleet managers from adopting EVs. In addition, Sierzchula (2014) suggested assuaging the consumers' uncertainty about EVs to increase the adoption rate.
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2022, Renewable and Sustainable Energy ReviewsCitation Excerpt :This result is related to the fact that the survey focused on mobility within the city, and asked for the barriers to the current deployment of EVs in the short term. Hence, experts allocated more importance to the barriers related to the vehicles than the barriers related to the infrastructure, contrary to what was found in the literature, see for example [11,17,51]. Besides, in the current situation, most of the early adopters of EVs would have recharging points at their private parking slots.
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2022, Research in Transportation Business and ManagementCitation Excerpt :Also, there are models that, in view of the limited range of vehicles, deal with optimized route planning or different charging strategies in order to increase the use of battery electric vehicles (Kim and Bae, 2020; Margaritis et al., 2016; Schücking et al., 2017). Moreover, there are many empirical studies dealing with factors influencing the use of battery electric vehicles (Sierzchula, 2014, Kolarova et al., 2018, Di Foggia, 2021, Roemer & Burs, 2021) or concrete obstacles (Vuichard, 2021; Wikström et al., 2016) and success factors (Bakker & Trip, 2013). Some of these have very specific focuses, such as fleet managers, policies, car sharing systems or the taxi service (Globisch et al., 2018; Illgen & Höck, 2018; Meisel & Merfeld, 2018; Vuichard, 2021; Yang et al., 2016).