A new study by a team from Aarhus University in Denmark has found that car dealerships pose a significant barrier to electric vehicle adoption at the point of sale due to a perceived lack of business case viability in relation to gasoline and diesel vehicles. Their study is published in the journal Nature.

In 126 “mystery shopper” experiences at 82 car dealerships across Denmark, Finland, Iceland, Norway and Sweden, the team found that that dealers were dismissive of EVs; misinformed shoppers on vehicle specifications; omitted EVs from the sales conversation; and strongly oriented customers towards gasoline and diesel vehicle options.

The researchers also found that dealers’ technological orientation, willingness to sell and displayed knowledge of EVs were main contributors to likely purchase intentions. The team concluded that policy and business strategies that address barriers at the point of sale are needed to accelerate EV adoption.

Dealers represent an important yet understudied intermediary between new innovations such as EV technology and consumers. Only three North America-focused studies exist as of 2017. For instance, a California-specific (United States) study suggests that EVs require new business and promotion strategies during sales processes, while a study across four US states and an investigation in Ontario (Canada) find that the (lack of) salespersons EV knowledge and positive attitude can influence customers’ purchasing decisions. However, these studies feature small sample sizes, lack cross-country comparisons or focus on early EV adopters.

Despite this dearth of research coverage, the role of industry actors is important because research suggests that current EV buyers can be categorized as early adopters with a higher technological acumen and knowledge of EVs, implying that they may aggressively and actively pursue EVs at the selling point. Early adopters, however, are a minority of the total market. Therefore, car dealerships and EV purchasing experiences at the point of sale may be where a majority of consumers first encounter the technology and also consider purchasing it.

For this reason, we investigate the prospect of purchasing an EV from the perspective of an average or mass market customer in 126 dealership shopping visits at 82 car dealerships across 15 cities in the 5 Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) triangulated with industry stakeholder interviews across these countries. We also analyse the effect of location-specific factors on EV purchases, such as the comparison between urban and rural settings, and the different tax, regulatory, commercial and social conditions of each country. This includes comparisons between the EV global leader Norway, an intermediate adopter (Sweden), and the less developed EV markets of Finland, Iceland and Denmark.

—de Rubens et al.

The researchers posed as mystery shoppers to visit the dealerships, and showed no initial inclination to any particular type of vehicle. To ensure validity, the shopping encounters were triangulated with 30 expert interviews with major automobile manufacturers, importers and associations, and other related organizations such as EV charging station providers across the Nordic region.

Among their findings:

• Out of the total 126 dealership visits conducted, only 8.8% of the mystery shopping encounters resulted in the shoppers having preferred an EV option for their next car purchase over an ICEV; this drops to just 2.9% outside of Norway.

• In the 77% of the car dealerships visits that had EV brands and EV models available, the salesperson did not discuss the existence of the brand’s EV.

• In two-thirds of all shopping experiences, sales personnel strongly or solely oriented the customer to select a gasoline or diesel vehicle, and actively dismissed EVs, even when dealerships had EV options for sale.

• In 71% of the visits, dealers demonstrated either low displayed knowledge of EVs or no knowledge at all.

• More than half of the expert interviews noted that both the car dealership and sales personnel lack a willingness to sell EVs because of anticipated low profitability, lack of knowledge and competence to sell, and extended sales time per EV purchase, in comparison with internal combustion engine vehicles (ICEVs).

Ultimately, the implication seems to be that EVs are at a severe disadvantage at the point of sale when competing with petrol and diesel options. Without more progressive action on behalf of industry and government, dealers have little to no incentive to properly sell EVs, even in a Nordic region so steadfastly committed to decarbonizing transport.

—de Rubens et al.

Resources

• Gerardo Zarazua de Rubens, Lance Noel & Benjamin K. Sovacool (2018) “Dismissive and deceptive car dealerships create barriers to electric vehicle adoption at the point of sale” Nature Energy doi: 10.1038/s41560-018-0152-x