Oxford Energy Forum – EV Uptake in the Transport Fleet: Consumer Choice, Policy Incentives and Consumer-Centric Business Models – Issue 122

This issue of the Oxford Energy Forum follows on from OIES’s third transport workshop, held in Oxford in late 2019. The workshop focused on three factors that are likely to influence the uptake of electric vehicles (EVs) in the transport fleet: government policy incentives, consumer choice, and the need for consumer-centric business models. EVs are still a nascent technology and rely heavily on government incentives. Governments have a range of instruments at their disposal, from subsidizing EVs to taxing or banning internal-combustion-engine vehicles (ICEVs). These policies are not equivalent in terms of effectiveness, efficiency, and public acceptability. For instance, consumers may prefer subsidies on EVs to taxes on ICEVs, but subsidies are inefficient. Similarly, bans on ICEVs may be effective, but may not be publicly acceptable if they limit consumer choice. This suggests that government incentives and policies to encourage EV uptake need to be designed with careful consideration of the possible trade-offs between efficiency, effectiveness, and consumer preferences. Meanwhile, consumer choices take into account not only government incentives but also their own preferences (e.g. for shared mobility or car ownership) and constraints (e.g. budgets). Understanding the determinants of consumer choice is therefore crucial to avoiding misalignments between the design of government incentives and consumer preferences. To be viable, transportation-sector business models need to be consumer-centric – in other words, built around a deep understanding of customers’ needs, preferences, and values and the contribution that each of these makes to the company’s profitability. The eight articles in this issue debate different aspects of these fundamental trade-offs and their policy implications. The articles in this issue debate different aspects of these fundamental trade-offs and their policy implications.

By: OIES