2024 AI LEADERSHIP SUMMIT HIGHLIGHTS

Read more

Opinion article

How to rapid-charge EV adoption in Australia

It’s well known that cost, availability and, in the recent past, a lack of infrastructure, government incentives and regulation have slowed the uptake of electric vehicles (EVs) in Australia. But another important aspect that has been missing from the debate so far is consumer behaviour. 

It’s well known that cost, availability and, in the recent past, a lack of infrastructure, government incentives and regulation have slowed the uptake of electric vehicles (EVs) in Australia. But another important aspect that has been missing from the debate so far is consumer behaviour. 

In the first six months of this year, sales of new EVs have already surpassed total EV sales in 2022. That meant that 8.4 per cent of new vehicle sales were electric in the first half of 2023, up from 3.8 per cent for all of 2022.

Government initiatives including financial incentives, infrastructure and regulation have coincided with this pick up in EV sales. In April 2023, the Australian Government released its first National Electric Vehicle Strategy, which aims to reduce transport emissions by making EVs more affordable. It also launched a consultation on fuel efficiency standards for new light vehicles.

The Australian Government also introduced an FBT exemption for new EVs under the Luxury Car Tax threshold for fuel-efficient cars in 2022. This has made some EVs cost competitive with a comparative internal combustion engine (ICE) vehicle.

Most states and territories have also introduced initiatives to increase EV uptake (Table 1).

However, it is well known that people do not always behave the way we might expect – subsidies, cheaper vehicles and more charging stations are not enough to ensure the take-up of EVs. 

Attitudes, perceptions and norms are just some of the other behavioural factors that may influence EV adoption. Investigating these behavioural barriers can facilitate more targeted responses to each customer segment to encourage more rapid EV adoption.

International experience

Research by the Sustainable Energy Authority of Ireland suggests there are at least three stages of behaviour that relate to EV adoption: 

  • Forming an opinion or intention around EVs; 
  • Investigation and research; and 
  • Purchase of an EV.

Each stage has different behavioural barriers and drivers

In Ireland, New Zealand and the UK, research has suggested the following behavioural barriers to EV adoption.

Social desirability and social norms 

Users tend to follow what peers and others are doing. This includes both what others are actually doing, as well as perceptions of what others are doing or would approve of doing. If very few people currently own an EV, then it seems reasonable also to not own an EV.

On the other hand, if there are more EVs on the streets, users may be more inclined to think it is desirable to have an EV. 

If social desirability is a key barrier for Australians, governments should focus initiatives that directly address it. For example, in Norway, EV drivers were able to access free municipal parking in cities and use bus lanes. This created visible benefits for EV drivers, potentially making it appear more socially desirable to drive an EV. 

Comfort zone 

Many users are comfortable with their current vehicle, so much so that EVs might not even come to mind as an option. This comfort-zone barrier can also extend into concerns about range anxiety, charging times and battery performance. For example, consumers know that they can find a petrol station almost anywhere they need one, but they may not know enough about EVs to be comfortable with the charging experience and driving range needs. 

If a major barrier to EV adoption in Australia is perceived limited driving range, a suitable intervention might be to show consumers that EVs can easily meet their actual driving needs

Studies in New Zealand found that more than 90 per cent of daily vehicle travel was under 90 kilometres, which is well within the capacity of a single EV charge. Providing information on how charging matches daily use can help address this barrier.  

Present bias

Humans have a tendency to focus more on upfront costs than on ongoing running costs. For EVs this is relevant because the upfront costs of purchasing an EV is currently higher than other vehicle options but the ongoing running costs are lower. This bias towards focusing more on the present costs can amplify the cost-related barrier to EV purchase. Indeed, the perception of high costs was found to be an important barrier to EV adoption in New Zealand and the UK

Information overload

When faced with the need to make a decision and to process a lot of information, humans have a tendency to avoid making a choice. For EV adoption, evidence in UK and Ireland suggests that users feel overwhelmed by the amount of information they need to wade through, which can then prevent the purchase of an EV.

Next steps

To date, Australian EV policy and strategy has ignored behavioural barriers, even though different behavioural influences and barriers warrant different responses.

Australian governments need to address this through:

  • Investigating customer biases and barriers to EV adoption;
  • Considering how behavioural insights might further promote the uptake of EVs; and 
  • Designing behaviourally-informed initiatives that address key barriers.

For the national EV strategy to reach its full potential, governments must take behavioural barriers into account in designing policy and initiatives.


About the authors
DA

Danika Adams

See all articles
Danika Adams is a Senior Economist based in WA at the Committee for Economic Development (CEDA). Prior to joining CEDA, she was an Associate Director at Deloitte Access Economics, where she focused on transport, future mobility, infrastructure and land use economic and policy analysis. Danika has worked across public policy and economics throughout her career, holding a public policy role at RAC (WA) and Economist and Policy Adviser roles at the Chamber of Commerce and Industry (WA). Danika holds a Bachelor of Economics from the University of Western Australia.
WH

Wing Hsieh

See all articles
Wing is behavioural scientist and Director, Health, Human Services and Behavioural Economics and the Behavioural Sciences Lead at Deloitte Access Economics. Her work at Deloitte focuses on helping clients to make evidence-based decisions, and better understand the impact of their programs and initiatives through evidence reviews, monitoring and evaluation and behavioural-informed design.
EC

Ember Corpuz

See all articles
Ember leads CEDA’s research in justice and has contributed to research in CEDA’s work in disrupting disadvantage. She is also a doctoral researcher at the University of Adelaide. Her research focuses on critical social psychology and intersectionality.