But electric vehicles – which Bloomberg New Energy Finance sees making up 55 per cent of all new car sales globally by 2040, and being cheaper to make than internal combustion engine cars by 2030 – still have a number of major hurdles to negotiate.
And, as we know all too well here in Australia, some countries face a tougher task that others, where universal barriers like cost, infrastructure, and consumer lag are being exacerbated by lack of supporting policy incentives, and the push-back from powerful vested interests.
But according to a new study published in Nature Journal this week, there’s another “largely unexplored” and fairly significant barrier to EV uptake – and it’s happening at the point of sale.
A team of researchers from Aarhus University in Denmark visited 82 car dealerships across Scandinavia posing as potential shoppers, and found that sales personnel were dismissive of electric vehicles, misinformed consumers about them, and encouraged the purchase of petrol and diesel vehicles instead.
In some cases, they found, EVs were omitted from sales pitches entirely, despite the fact that the vast majority of all major global auto makers now offer multiple electric vehicle options, with some, like Volvo, committing to switch their entire fleet to electric or hybrid electric starting next year.
“(Gerardo) Zarazua de Rubens and colleagues’ study provides much-needed insight into this area through an extensive mystery shopping exercise that spans 15 cities in five Nordic countries,” the report says.
“By quantifying their experiences as potential customers and recording key quotations from sales personnel, …(they) demonstrate that sales interactions are unlikely to result in EV purchase because sales personnel are dismissive of EVs, provide incorrect information and strongly orient customers to other options.”
The team also interviewed 30 different industry experts, who corroborated the study’s findings, describing EVs as both harder to sell and less incentivised, in that they were expected to produce lower profits for the dealerships.
That’s because electric vehicles – with significantly fewer moving parts – require far less servicing than fossil fuelled ICE cars.
“While an added benefit of EV technology for the user is a substantial reduction in routine maintenance and repairs, this also represents a further disincentive for the dealer to promote EV technology because they rely heavily on income from repairs and maintenance as part of their revenue model,” the report says.
On top of this, the study found, sales personnel do not receive adequate training on electric vehicles that would support effective sales strategies.
This means that consumers who are not already well informed about or interested in electric vehicles, and who might see one for the first time at a car dealership, are unlikely to have experiences that encourage them to purchase one.
This is certainly supported by anecdotal evidence in Australia, where even if car dealers were enthusiastic about EVs (they are not) there just aren’t the cars there to sell.
As recently as March this year, there were only five pure electric vehicles available for purchase by Australian consumers, three of which fall into the luxury vehicle segment in terms of cost.
But perhaps the clearest message from the Danish study’s findings is that it is not just the global oil industry, and established car manufacturers, who stand to lose out from the global shift to EVs – and who therefore might be actively resisting it.
We can now add to that list another major industry group whose business case is being threatened by EVs: car dealers.
This particular lobby group’s muscle has been most obviously flexed in the US, where local EV maker Tesla has been legally prohibited from setting up dealerships in a number of states, due to an easily exploited quirk of that country’s franchise laws.
It’s also worth noting that if these are the results being returned in Scandinavian countries – the study is based on 126 sales interactions in car dealerships across Denmark, Finland, Iceland, Norway and Sweden – then the situation is likely to be far worse in countries like Australia.
Because, of course, car dealers are not operating in a vacuum. The study found that the pitch on the sales floor was highly influenced by signals from both industry and policy – neither of which are what you would call progressive in Australia.
“EV adoption in places like China, Norway and the United States (where half of all EV sales are in California) are driven by policies that strongly encourage EV adoption,” the Nature journal report says.
In Norway, for example, the cost of purchasing an EV is subsidised, and EV drivers have access to bus lanes and enjoy free parking.
This kind of policy has seen the Scandinavian country, which also happens to be a major oil producer, become the closest in the world, in relative terms, to bringing EVs to the mainstream, the study says.
By the end of 2016, 5 per cent of all registered passenger cars in Norway were plug-in electric vehicles (PEVs), and one-quarter of sales of new vehicles are PEVs.
Australia, meanwhile, has zero federal government incentives driving EV uptake and instead relies on the varied efforts of the states and territories.
Last year we witnessed that even the prospect of introducing nation-wide vehicle emissions standards – basic policy practice in most of the rest of the world – had the local Conservative media dubbing it as a “carbon tax on cars.”
As Greens Senator Janet Rice put it earlier this year, “We’ve got a (government) that is beholden to vested interests and old technologies; people who just want the status quo to continue.
“Energy minister Josh Frydenberg has just recently been talking really big on EVs, but his party is saying that they are going to make up 15 per cent of new vehicle sales by 2030, which is just pathetic.”
And if this is the status quo at the policy level, it’s unlikely there’s any sort of EV revolution happening on the salesroom floor.
So what can be done to change this?
The study concludes that industry and policy incentives are necessary to create the right market conditions to encourage sales personnel to promote electric vehicles to consumers, rather than dismiss them.
In particular, policy and business strategies that addressed these barriers at the point of sale were needed to accelerate EV adoption.
“There is clear evidence that EV policies can have a substantial impact on the adoption of EVs,” the report says.
“The study by Zarazua de Rubens et al. indicates that we need to turn our attention to developing ‘pull’ policies for dealerships to stay on track for large-scale adoption of EV technology.”