The diffusion in the population

The theory of diffusion of innovations developed by Rogers (1962, 1995), seeing diffusion as a social process, has been used as the main theoretical baseline for explaining the development of the market and the rate of diffusion of BEVs in Norway. In addition, newer theorists like Axsen and Kurani (2012, 2013) emphasise that technology diffusion processes take place within a social system. They add important aspects concerning the importance of interpersonal relationships. Crucial factors involved in the way the new technology can meet the user needs, are shown in figure 7.4. The users must be seen in a wider sense, from individuals to decision makers at different levels and sectors.

Figure 7.4 Factors in the diffusion process that influence the rate of adoption. Source: Rogers 1995.

The technology itself, its characteristics and ability to meet user needs, and the ability to change the technology during the process to avoid possible weaknesses, are the key elements of diffusion. The rate of diffusion (Rogers 1995) is influenced by the perception of technology with respect to:

• The relative advantages of the innovation related to other technologies, can be financial, practical, environmental and personal, giving social status or

satisfaction. Examples are economic profitability, low initial cost, and improved comfort, saving time or effort, immediacy of reward.

• The compatibility withthe users’ needs, basic values and norms in the social system. The more radical and disruptive the technology and the less its

compatibility with existing practises, norms and values, the slower will its rate of adoption be.

• The complexity conceives how easy it is to understand and put the technology to use, and its ability and flexibility to accommodate more opportunities. The more complex the innovation, the lower the adoption rate is.

• The trialability applies to the opportunity for trial. Innovations that can be tried out in a small scale are perceived as less uncertain and easier to implement than those requiring full implementation immediately. Trialability is more important for early than for later adopters. The latter will be helped by information from adopting peers.

• The observability/visibility for new users can increase the speed of implementation. This factor stresses the importance of network communication and the strategy for launching the product.

Incentives to speed up BEV adoption should address these factors, especially the first one, relative advantage. This factor is the most influential in the diffusion process when prospective BEV buyers consider the benefits and costs of taking BEVs into use. Some factors influencing relative advantage and the importance of incentives are shown in table 7.1. See also table 6.4. The incentives turn BEV

ownership into an advantage already for the first owner of the vehicle, thus being the key to the BEV success story in Norway.

Table 7.1 Elements of relative advantage. Assessment of first owners’ evaluation of the potential of each element without and with the Norwegian BEV incentives. Source: Figenbaum and Kolbenstvedt (2015)

Factors in assessing relative advantage

Without incentives With Norwegian incentives

Economic

profitability Vehicles are too expensive and expected second-hand value after 3-5 years is low. Total cost of ownership over lifetime may be positive through lower energy costs.

Profitable for first owner, but the risk of second-hand value still relevant. Vehicles bought 2010-11 have potentially been unprofitable due to the rapid falling new- vehicle prices depending on usage of incentives. Low initial

cost BEVs are more expensive than ICEs. Value added tax on top expands the cost gap. Equalize the price in smaller vehicle segments. BEVs are cheaper than ICE vehicles for larger vehicles A decrease in

discomfort Discomfort due to range limitations although many users’ driving needs are compatible with range limits. Need to plan better

Not available with 4-wheel drive

User advantages result in increased comfort. BEVs are in accordance with societal environmental goals. People can afford buying them. Concerns of second-hand value are reduced as the owner potentially saves more each year by low operative costs and incentives than what is risked. Not available with 4-wheel drive. Need more planning. A saving of

time and effort More efforts needed, i.e. planning the transport, range challenges, time to plug in the vehicle, borrowing vehicles when needed.

The effort of planning is reduced by time saved using bus lanes and less time to finding parking. Vehicles are cheap enough to be used by multi-vehicle households being capable of handling range challenges.

Immediacy of

reward Not possible for first owner, the vehicle is too expensive and the savings per year too low, and the second hand value uncertain.

Time and cost savings from day one are achieved with low energy costs, low annual tax and free of charge toll roads, reduced ferry fares, free parking and access to bus lanes

Social Prestige Teslas and BWM i3s give prestige, but basic BEVs may have such poor value

proposition that prestige could be negative?

Possible for everyone to buy a BEV, democratizing BEV diffusion, but also reducing social prestige.

Environmental standing in the population

Not a dominating motive initially in Norway, but important for some. May be an important motive in countries earlier in the diffusion phase.

Increasing as a motive after buying BEVs. A possible negative factor is that it becomes easier (morally) to justify buying a second household car.