Master's Thesis Business Administration
Small Business & Entrepreneurship
The Electrification of the Automotive Market:
An Exploratory Research on the Theory of Planned Behaviour Model for Purchase
Decisions of Innovative Products
Groningen, January 2021
Abstract
This exploratory research focuses on factors that influence a consumers’ purchase behaviour in the innovative car market of electric vehicles. Prediction of purchase behaviour is very important for businesses in order to increase chances of survival, therefore a model to make this prediction is desired. In order to create such a model, the Theory of Planned Behaviour model is used as a basis. With the use of a focus group and an expert interview, several factors are found to influence a consumers’ purchase behaviour. After comparing the results with existing literature, a number of propositions have been made which can be further investigated in future research. For practitioners in the field of innovative products like electric vehicles, the proposed model can serve as a guidance for responding to consumer demands. For practitioners in the field of sales or marketing related to electric vehicles, three consumer profiles have been created.
Keywords: Theory of Planned Behaviour ⋅ Electric Vehicles ⋅ Innovation ⋅ Purchase Decisions.
Prefrace
This research is focused on the purchase behaviour of consumers in the car market, and more specifically the market of electric vehicles. This research has been commissioned by the Rijksuniversiteit Groningen (RUG) as a master's thesis project for the Master’s programme Business Administration: Small Business and Entrepreneurship (MSc BA SB&E).
With the help of my supervisor prof. dr. Aard J. Groen this research has been formed to become the final result which is presented here. I would therefore like to take this opportunity to thank my supervisor prof. dr. Aard J. Groen for his guidance and help with this project. I have experienced our collaboration as pleasant and constructive, and I have learned a lot during the process.
I would also like to take this opportunity to thank all participants who took part in the focus group session and the interview for the pleasant and at the same time constructive talks. And ofcourse for their preparedness to help me with my research and taking the time to do so. Without them, this research could not have been completed.
Wiard Jansma,
1. Introduction 4
2. Literature review 6
2.1. Theory of Planned Behaviour 6
2.1.1. Completeness of the TPB Model 7
2.2 Transition of the Car market 8
2.2.1. Type of Innovation 8
2.2.2. Adoption of EVs 9
2.2.3. Sociological Factors 11
2.2.4. Driving Pleasure 12
2.3. Aim of the Study 13
3. Methodology 15 3.1. Data Collection 15 3.2. Analysis 16 4. Results 18 4.1. Adoption Process 18 4.2. Sociological Aspects 19 4.3. Driving Pleasure 20 4.4. Future of Driving 21
4.5. Incentives for Electric Driving 21
5. Discussion 22 5.1. Adoption of EVs 22 5.2. Sociological Factors 24 5.3. Driving Pleasure 25 5.4. Future of Driving 25 5.5. Consumer Profiles 25 6. Conclusion 27 6.1. Theoretical Implications 27 6.2. Managerial Implications 27
References 29
Appendices 32
Appendix 1: Focus groups - A roadmap by Assema et al. (1992) 32
Appendix 2: Focus Group Session 33
2.1. Participants (n=7) 33
2.2. Guideline 34
2.3. Results (Table with outcomes + transcript of discussion) 35
Appendix 3: Expert interview 42
3.1. Participant (n=1) 42
3.2. Guideline 42
1. Introduction
In the year 2018 the total amount of cars sold worldwide was well over 80 million, according to Carsalebase.com (Demandt, 2019). When it comes to the purchase of a car, this cannot simply be seen as a simple, rational economic decision making process (Sheller, 2004; Ryghaug & Toftaker, 2014). The purchase decision of a car is about the “ aesthetic, emotional and sensory responses to driving ” (Sheller, 2004, p. 2). The idea of cars just being practical machines which are meant to move people from A to B, has become too simplistic in modern society. As Sheller (2004) points out in a nice way, the car is indeed a machine that moves people, but does so “ in many senses of the word ” (p. 3). One of these senses of the word, is the joy of driving, or driving pleasure. This is seen as one of the most important characteristics of a car (Hagman, 2010). This is also stated by Ryghaug & Toftaker (2014), who state that the joy of driving can be seen as a major part of the affective motive for car usage. It is for a reason that big car brands like BMW or Peugeot use slogans like “ Sheer Driving Pleasure” (BMW) and “Motion & Emotion” (Peugeot). These slogans induce the affect heuristic of the consumers. Therefore it can be assumed that the driving pleasure can be seen as an important factor for the consumers in the automotive market.
Predicting customer purchase intention in general is seen as a challenging and complicated task, but also of big importance for organizations (Rizvi et al., 2018). When looking at purchase intentions regarding cars, it is important to know that the car is seen as a high involvement good (Rizvi et al., 2018). A high involvement good implies that one puts in more effort (high involvement) in evaluating the good (a car's performance for example), to make sure one makes the right decision. The detailed product attributes are therefore more interesting for consumers (how they rate these specific attributes instead of just a perceived quality) (Rizvi et al., 2018). As mentioned, with high involvement goods, the process of purchase behaviour is even more complicated. In their study Rizvi et al. (2018) use the theory of planned behaviour model to examine the factors that influence the purchase intentions for cars. The Theory of planned behaviour states that the intention to act arises from “ consumer beliefs about the outcomes of an action, their attitude towards the particular behavioral action, their perceptions of the opinions of their significant others, and their perception of the amount of control they have over the action” (Rizvi et al., 2018, p. 53).
In the past few years the automotive market has undergone, and is currently still undergoing a transition from combustion engined to becoming more and more electrically powered vehicles. The global attention towards the pollution of private cars has been a result of events like the Dieselgate scandal back in 2015 (Kershaw et al., 2018). The electrification of the automotive market is seen as a major component in the race against the growing carbon dioxide (CO 2) emission. To explain why cars need to change to win this race, numbers speak louder than words. In the EU the CO 2emission from road transport grew with roughly 23% in the years 1990 to 2010 (Rezvani et al., 2015), and in the U.S. the transportation sector even became the largest contributor of CO 2emission in 2017 (Carley et al., 2019). The passenger car is one of the major sources of CO 2 emission, as the passenger cars produced 15% of the EU’s total CO2 emission in 2012 (Rezvani et al., 2015).
climate goals of cutting CO 2emission by 20% (Rezvani et al., 2015), it is suggested that 80-90% of newly sold vehicles should be non-emitting (Long et al., 2019). Though the actual percentage of EVs in the total number of newly sold vehicles is currently way lower (15% in the Netherlands in 2019) (Wagner, 2020).
For car manufacturers as well as for dealerships it is important to know what drives people to make a purchase, and moreover being able to predict this. In the existing literature about EVs, the purchase intention has mostly been considered by solely looking at practical aspects (e.g. driving range) of vehicles (e.g. Prud’homme & Koning, 2012; Axsen & Kurani, 2013; Ryghaug and Toftaker, 2014; Rezvani et al., 2015). Even though compelling evidence for the existence of a relationship between car attributes and purchase intention with regard to hatchbacks has been proven by Rizvi et al. (2018), further research on this topic is proposed (Rizvi et al., 2018). As Rezvani et al. (2015) propose to include emotional aspects, this paper will take on the proposed further research on the purchase intention of consumers regarding EVs and include these emotional aspects. This will be done by proposing an extension to the Theory of Planned Behaviour model by Ajzen (1991).
2. Literature review
2.1. Theory of Planned Behaviour
When it comes to the decision making with purchases, and more particularly with the purchase of high involvement goods (such as cars) (Rizvi et al., 2018), one of the most commonly used theories in existing literature is the Theory of Planned Behaviour (from here TPB) by Ajzen (1991) (e.g. Ajzen, 2001; Ajzen, 2011; Sommer, 2011; Barber, 2011). The TPB is an extension of the Theory of Reasoned Action (TRA) by Ajzen & Fishbein (1970), which lacked to take into consideration that people can have “incomplete volitional control” (Ajzen, 1991, p. 181). This meant that the TRA could only explain a part of the human behaviours. The aim of the TPB is to explain more kinds of human behaviours, even though humans are complex beings and therefore difficult to explain. The theory is built around the idea that “behavioural decisions are the result of a reasoned process in which the behaviour is influenced by attitudes, norms and perceived behavioural control ” (Sommer, 2011, p. 91). This results in figure 1, which indicates that the TPB model exists of three independent variables, which are ‘attitude toward the behaviour’, ‘subjective norm’ and ‘perceived behavioural control’. These are linked to the mediating variable 'intention’, which in turn is linked to the dependent variable ‘behaviour’ (Ajzen, 1991). Ajzen (1991) states that the general rule for this model is that the higher the variables ‘attitude toward the behaviour’, ‘subjective norm’ and ‘perceived behavioural control’, the higher the intention of the individual to perform the behaviour. Though, the importance of each variable is subject to the situation or behaviour that is in play. This means that for some situations one variable might show a significant effect, while in another situation this variable doesn’t. This implies that in some cases only one or two of these variables account for the variable ‘intention’.
Figure 1: Theory of Planned Behaviour Model (Ajzen, 1991).
To clarify what all of these variables mean, they will each be elaborated shortly.
Intention:
Attitude:
One of the underlying factors that influence one’s intentions, is one’s attitude. Attitude is described by Ajzen (1991) as “ the degree to which a person has a favorable or unfavorable evaluation or appraisal of the behavior in question ” (p. 188). To put it in other words, this implies one’s positive or negative feelings towards a behaviour.
Subjective Norm:
The second underlying factor which influences one’s intentions, is one’s subjective norm. Subjective norm as described by Ajzen (1991) implies “ the perceived social pressure to perform or not to perform the behavior ” (p.188). This means that one takes the ideas of other important individuals about the behaviour into account.
Perceived Behavioural Control:
The third underlying factor which influences one’s intentions, is perceived behavioural control, which is the factor that has extended the TRA model to become the TPB model. The perceived behavioural control not only indirectly influences one’s behaviour through one’s intentions, but also directly influences one’s behaviour. Ajzen (1991) describes perceived behavioural control as “ the perceived ease or difficulty of performing the behavior and it is assumed to reflect past experience as well as anticipated impediments and obstacles ” (p.188). So the influence of perceived behavioural control in the model is based on two rationales. First, the greater one’s perceived behavioural control, the more likely one will perform the behaviour. And secondly, perceived behavioural control is said to be reflecting one’s actual control.
2.1.1. Completeness of the TPB Model
Even though the TPB model is, as described earlier, one of the most commonly used theories in literature when it comes to social behaviour, not everyone agrees with it. Where some papers back the predictive power of the TPB model (e.g. Rizvi et al., 2018), several other papers (e.g. Armitage & Conner 1999; Barber, 2011; Sommer, 2011) question the completeness of the TPB model in several ways. Sommer (2011) highlights for example that the model only explains the correlation between intention and behaviour for a small third of the time. Next to this Armitage & Conner (1999) even state that the Perceived Behavioural Control variable is “ not a significant predictor of either behaviour or intention ” (p. 49). In their study, where they tested the predictive power of the TPB with food choices, they found evidence for self-efficacy to be a predictive factor which could replace the Perceived Behavioural Control factor and would therefore be a great addition to the TPB model. Sommer (2011) conducts a meta-analysis in his paper, in which he looks at the role past behaviour plays when it comes to predicting behaviour. While others state that past behaviour is an independent predictor of future behaviour (Armitage & Conner, 1999), Sommer (2011) did conclude that past behaviour can be integrated into the TPB model.
between the lines’. They all agree that the TPB model is relying on the idea that people make decisions in a logical or rational way, while actually in many cases they are not and rather made in an irrational or unreasonable way (Barber, 2011). In the case of a car purchase though, the decision making is mostly reliant on the rational thinking of the consumer, as “ a careful thinking process” (Rizvi et al., 2018, p. 52) is required.
2.2 Transition of the Car market
In the past decennia a lot has changed in the car market. A factor that has greatly influenced this change, is the energy transition which is currently due to lower CO 2emissions. In the car market this energy transition has resulted in the uprise of the ever more electrified vehicles. The EV was already first introduced way back in the early 1900’s, but didn’t make it to the finish line in the race against the combustion engined vehicle, and was therefore ever since considered as “ a failed technology” (Ryghaug & Toftaker, 2014, p. 146). Though today, the EV is on the rise.
Currently existing literature on EVs fails to take the presence of the different types of EVs into account, although this is something important to incorporate when speaking of EVs (Rezvani et al., 2015). This is supported by Axsen & Kurani (2012), who point out the importance of differences in EVs when looking at consumer interests. Therefore this study will emphasise the difference between the internal combustion engined vehicle (ICEV) or as in this study, combustion engined vehicle (CEV) and three different types of EVs. These three types arise from the different technologies which are used in EVs. These different technologies range from partly electric powered engines, to being solely driven by electric motors. The different types that exist are the Hybrid Electric vehicles (HEVs), the Plug-in Hybrid Electric Vehicles (PHEVs), and the Battery Electric Vehicles (BEVs) (Axsen & Kurani, 2012). The differences between these types of EVs lay in their drivetrain and way of charging. The HEVs and PHEVs are driven by a combustion engine combined to an electric motor, where the BEVs are solely driven by electric motors. When it comes to charging these EVs, the BEVs are mostly reliant on the grid. They are charged through a power cable, and the regeneration of kinetic energy can provide a few extra kilometers of range while driving. PHEVs, as Plug-in already suggests, also charge with the use of a power cable. This is its main way of charging, although the PHEVs are also able to charge while driving through the regeneration of kinetic energy. From the three EV types, only the HEVs are not charged with the use of a power cable. HEVs rely on the recovery of kinetic energy. In the HEVs and PHEVs the combustion engine can also be used to (partly) regenerate the battery (Axsen & Kurani, 2012).
2.2.1. Type of Innovation
In their paper Norman & Verganti (2014) state some criteria to identify if an innovation is regarded as radical. The first criterion concerns the novelty of the invention, which must not be similar to previous inventions. The second criterion concerns the uniqueness of the invention, which also must not be similar to previous inventions.
In the case of the automotive branche, incremental innovation can be related to improvements like the fuel efficiency of an engine. This type of innovation has long been used in order to comply with the regulations regarding the emissions of cars. Though, as a result of the ever more demanding regulations, the electrification of the automarket emerged. This electrifying process belongs to radical innovations (Pilkington & Dyerson, 2006). This is supported by Kershaw et al. (2018) who regard the electrification of the transport sector as a disruptive technology, changing ‘the way we do things’. Though others see the electrification of the car market as an environmental innovation. An environmental innovation is different from ‘normal’ innovation, as there are three aspects in which they differ (Yarahmadi & Higgins, 2012). Firstly, by altering social norms or cultural values, environmental innovation goes further than ‘normal’ innovation. To put it differently, the scope of environmental innovation is broader. Secondly, environmental innovation is aimed explicitly at the reduction of environmental damage. Thirdly, environmental innovation creates two side effects: (1) creation of knowledge in the research and innovation phases, followed by (2) reduced environmental effects. This type of environmental innovation is also called ‘green innovation’ or ‘green product innovation’. As introduced by Dangelico (2016) ‘Green products’ are described as “ products that use less resources, have lower impacts and risks to the environment…” (p. 561). The reasons for companies to engage in the development of ‘green products’ can either be internally or externally driven. The main internally driven reasons are the creation of a competitive advantage, the reduction of costs and the expected increase of reputation (Dangelico, 2016). Another internally driven reason for firms to adopt ‘green innovation’, is the opportunity of opening a new market in which they can become market leader (Yarahmadi & Higgins, 2012). When looking at the externally driven reasons, the main ones are regulations (environment related) and market demand. It is also expected that when environmental regulations are imposed, firms will innovate further than required by the regulations (Dangelico, 2016).
Though, whether environmental innovation is a type of innovation can be questioned. According to Norman & Verganti (2014) environmental innovation should be seen as a classification of innovation rather than a type of innovation. In their eyes classifications of innovations relate to the drivers of the innovation itself. In the case of EVs it can be said that the environmental perspective makes this its main driver. In this paper the innovative process of cars (EVs) will therefore be regarded as a radical environmental innovation.
2.2.2. Adoption of EVs
consumers are more interested in PHEVs rather than BEVs. This is because the PHEV uses a combination of a familiar technology (combustion engine) combined with a more unfamiliar (electric) technology, instead of using solely an unfamiliar (electric) technology (Ryghaug & Toftaker, 2014). These feelings of unfamiliarity are a result of lacking experience with- and knowledge of the technology of BEVs, and the state of its technological development (Axsen & Kurani, 2012; Sovacool et al, 2019). Though others point out that this feeling of unfamiliarity is not shared by everyone (Kershaw et al., 2018). According to them, vehicles which are driven by electric motors are not seen as frightening, as first encounters with these EVs are experienced the same as first encounters with CEVs. As EVs recently have become more and more familiar vehicles on the streets, it is most likely that (when it is perceived) the supposed resistance towards the ‘unfamiliar technology’ of EVs has been reduced for a certain amount. Ryghaug and Toftaker (2014) explain this as a side effect that occurs when more EVs are used. They state that this will demonstrate that driving an EV is ‘normal’, resulting in EVs becoming a more ‘reasonable choice’ for others as well. Axsen & Kurani (2013) confirm this line of thinking as they expect the perceptions of consumers will change when they gain more experience with the EVs. All in all, when a feeling of unfamiliarity with the technology of EVs exists for a consumer, this might negatively influence one’s attitude towards the product (in terms of purchase behaviour). This results in the first hypothesis:
H1: “Unfamiliarity of a new technique in a product is negatively related to one’s attitude towards it.”
Also costs play a role, as the upfront costs of an EV compared to a similar CEV are high (Prud’homme & Koning, 2012; Rezvani et al., 2015). From the study of Prud’homme & Koning (2012) it appeared that over a lifetime of a car, the costs of a fully EV can rise up to around 12.000 euros more compared to a similar CEV. During this lifetime of a car, also societal costs for fully EVs compared to similar CEVs are higher (up to around 15.000 euros). Though this study is based on EVs which have a range of 150 kilometers (outdated vehicles), therefore these extensive costs will likely still exist, but be different now. Rezvani et al. (2015) confirm that costs of ownership and driving are indeed important factors for consumers. As with the unfamiliarity of the technique, the costs also influence one’s attitude towards the product. This results in the second hypothesis is:
H2: “The higher price of a green product compared to a non-green product negatively influences one’s attitude towards it.”
Finally Sovacool et al. (2019) state that the main determinant in the decision making process - whether to buy an EV or not - lies in the facilitation of a charging network. The higher the facilitation of a charging network for a consumer, the higher the intention to buy an EV. On the other hand, it is stated that the problem of lacking charging facilities isn’t influencing one’s willingness to adopt, given that people can charge at home and reach daily commuting for example (Ryghaug & Toftaker, 2014; Sovacool et al., 2019). Though as the infrastructure of the charging network is seen as an important factor in the decision making process, it can be assumed that it influences one’s attitude towards EVs. This results in the following hypotheses:
H3: “The charging infrastructure of EVs is positively related to one’s purchase intention (H3A) and attitude (H3B) towards it.”
will reach speeds of over 100 kilometers an hour in (sometimes way) under 6 seconds; EVs can easily achieve highway speeds and have driving ranges of over 300 kilometers (EV-database.nl, 2020; Wagner, 2020). When taking these developments into account, it can be stated that EVs have become highway-capable, conventional like cars (Long et al., 2019). This rate of development also has a negative side, as the rate is so high that it creates a resistance to buy an EV now. It rather encourages consumers to wait out the developments and anticipate, in order to prevent buying a product which will be obsolete after a short period (Rezvani et al., 2015). It seems that the rate of the development affects the feelings towards purchasing a product. It is therefore assumed that when this rate is low to moderate, the effect is positive. But when the rate is higher than moderate the effect becomes negative, creating an inverted U shape. This results in the following hypotheses:
H4A: “A low to moderate development rate of a product is positively related to one’s attitude towards it.”
H4B: “A higher than moderate development rate of a product is negatively related to one’s attitude towards it.”
The adoption of a product is dependent on the investment a consumer has to do. Among these investments are learning requirements (how much must one learn to be able to use the innovation) and Switching costs (the costs that come along with the adoption of an innovation) (Gatignon & Robertson, 1985). Ryghaug & Toftaker (2014) in their study show that an individual who buys an EV can indeed be subject to these switching costs. As extra learning can be seen as a (non-financial) switching cost, this learning and extra costs of a product result in switching costs. It can be assumed that the height of these costs could influence one’s attitude towards the product, which results in the following hypothesis:
H5: ”Switching costs (consisting of learning requirements and extra costs) of a product are negatively related to one’s attitude towards it.”
2.2.3. Sociological Factors
Other than the practical sides of the adoption of EVs, there are also studies which point out the presence of sociological factors which influence the consumers purchase decision regarding EVs (e.g. Ryghaug & Toftaker, 2014; Long et al., 2019). In the social environment, family or organization members are said to influence one’s willingness to adopt. This is the so-called multi-person adoption (Gatignon & Robertson, 1985). Ryghaug & Toftaker even relate the purchase of an EV to the accession of a ‘clan’. It appears that people whose direct social environment (e.g. family, friends and colleagues) is positive about EVs, are also positive about EVs themselves (Ryghaug & Toftaker, 2014). As this affects the subjective norm of Ajzen (1991) of taking ideas of others into mind, the following is hypothesized:
H6: “The direct social environment is positively related to one’s subjective norm.”
loyal to their current brand, as they want to minimize risks. This has to do with the idea that they know what they can expect from the brand they are acquainted with. It can therefore be assumed that the brand influences one’s attitude towards the product, resulting in the following hypothesis:
H7: “The brand of a product is positively related to one’s attitude towards it.”
Next to the influence of a brand, there are also social factors that play an important role for consumers in their (purchase) behaviour (e.g. Nguyen et al., 2016; Wang et al., 2016). In fact, the social pressure individuals perceive from others or early adopters, is seen as one of the most important determinants in the intention to adopt (Wang et al., 2016). This is supported by Nguyen et al. (2016) who relate this to the collectivistic behaviour of people, and the regulation of the behaviour related to it. This collectivism exerts a strong impact on the subjective norms of individuals. This so-called social relevance, answers the question of how the adoption of the innovation impacts one’s social acceptance (Gatignon & Robertson, 1985). Though this idea of ‘proving yourself to others’ also presents itself in a different way. This is elaborated by Griskevicius et al. (2010), who start off their paper with a remarkable statement: “It shows the world that its owner cares ” (p. 392). This statement is related to a consumers’ main purchase reason for an EV (Prius, HEV). EVs are used as symbols to express one’s Identity (Rezvani et al., 2015). Consumers of ‘green products’ - like EVs - are willingfull to ‘pay more for less’, in order to obtain a certain status (Griskevicius et al., 2010). These customers choose the ‘green’ option, even though this is the more expensive choice whilst not offering more (most times even less) in terms of functionality. The idea is that through showing that an individual cares about the environment, this individual earns a better reputation, which increases the status of this individual. Differently said, this is acting altruistically but with one’s own self-interest as the main driver (Griskevicius et al., 2010; Axsen and Kurani, 2013). What is interesting though when it comes to the adoption of EVs, is that the personal norm of individuals - as in their responsibility towards the environment - has also been found to have a relatively small impact (Wang et al., 2016). As a relationship has already been proposed and green products are used as symbols of environmental friendliness and status, it is expected that this influences one’s subjective norm. Namely, the subjective norm concerns the perceived social pressure of an individual. Accordingly the following hypotheses have been drafted:
H8: “The environmental friendliness of a product is positively related to one’s subjective norm.” H9: “The status a product renders is positively related to one’s subjective norm.”
2.2.4. Driving Pleasure
Sovacool et al. (2019) point out that there is more that intervenes in the ‘pleasure of driving’. Because the acquiring of a car is a costly and involving process, people invest in them not only financially but also emotionally. As a result, this financial and emotional investment can initiate a cumulative effect regarding the ‘pleasure of driving’ (Sovacool et al., 2019). To put it more simply, the larger the amount of money spent on a car, can result in an increasing amount of perceived pleasure when driving this car. So, not only is the pleasure of driving a car a result of affective components, also the financial part has to be considered.
All in all, affection can be seen as a predictor of purchase behaviour (Tolba & Hassan, 2009). Car consumers in the economy class, as they are to buy a high involvement good, rely on heavy research before making a purchase. These consumers therefore value their purchase in the sense that they want it to be the right one (Tolba & Hassan, 2009). In this process they will try to acquire the car which will bring along the most affection. It can therefore be assumed that when a consumer seeks or experiences a higher driving pleasure, this will result in a higher intention of purchase. As it can be assumed from the above that driving pleasure influences one’s attitude towards a product and that the height of the investment influences this relationship, the following hypotheses have been drafted: H10: “Driving pleasure is positively related to one’s attitude towards the product.”
H11: “The height of the investment positively influences the relationship between driving pleasure and one’s attitude towards the product.”
2.3. Aim of the Study
In this paper the purchase decision of a car (the behaviour) will be the main focus area. As mentioned before, the purchase process of cars asks for more evaluation as the good is a high involvement good. In this case, the decision making process can therefore be seen as a rational process. Even though the TPB model of Ajzen (1991) in this perspective fits the purchase process of a car, it does not cover all important aspects that arise in this process. This has already been shown by Rizvi et al. (2018), who in their paper discussed the TPB model for the purchase decision for the acquisition of a car (hatchback) in Pakistan. They found that when it comes to the purchase decision of a high involvement good (like a car), the TPB does indeed explain a large part of the intention. In their paper Rizvi et al. (2018) tested an extended version of the TPB model in which the influence of product attributes on the attitude and purchase intention were included (see figure 2 below). The results suggested that these product attributes did indeed influence the attitude and purchase intention.
Though, the incompleteness of the TPB model for the purchase decisions of cars reemerges when including the recent innovation process of the car market - into offering more and more electrified vehicles. This paper will aim to explore if the TPB model of Rizvi et al. (2018) can be extended even more in order to be more able to make purchase predictions for consumers in the innovative market of EVs. To do so, the following question will be answered: “ How can the TPB model be expanded to become usable for purchase decisions of electric vehicles (innovative products)?”
Figure 2: Theory of Planned Behaviour Model expanded by Rizvi et al. (2018)
3. Methodology
This paper has been written in the form of an exploratory research. To do so, a combination of a systematic literature review and qualitative research were used to create a contribution to existing literature and provide suggestions for future research. For the qualitative research a focus group session and an expert interview were held. In this part the data collection and analysis will be further discussed.
3.1. Data Collection
For the establishment of this paper a mix of primary and secondary data has been used. The secondary data has been used for the foundation of the literature review of this paper. The literature used in this paper is related to, or investigates the topics of Theory of Planned Behaviour, Innovation, Energy Transition and Electric Vehicles. Some papers are solely focussed on one of these topics, while others are partly focussed on one, or combined two or more of these topics. To collect this literature, the electronic databases of the University of Groningen: SmartCat and Business Source Premier have been used. A list of the used literature can be found in the references.
In the process of gathering and selecting the literature, a number of steps have been taken. These steps have been taken separately for each topic in this study (e.g. EVs; TBP). The first step resulted in a set of papers which were found by searching for keywords (e.g. Electric Vehicles; Innovation) and filtered for solely peer reviewed academic journals (no (e)books and newspapers were included in this search). The second step was reviewing the set of papers by reading each abstract, introduction and conclusion, excluding a part (⅓) of the set. The third step entailed reading the remainder of papers fully, excluding another part (⅕) of the set. While working on this paper a few additional papers have been added, which were used in several papers of the initial final set. The previous steps resulted in the final set of papers used in this paper. An overview of these steps is presented in the figure (figure 4) below. The provided parts of excluded papers are not exact, but represent an approximate.
The primary data used in this paper are subtracted from discussions done in a focus group and from an expert-interview. To get insights into the ideas people have about the electrification of the car market, the best way of gathering primary data is through the use of focus groups. The main goal of these focus groups is to get an understanding of the ideas or feelings of people about a problem or phenomenon, without the directing interference of the researcher (Assema et al., 1992). The main advantage of using focus groups for this study is the large amount of information about a topic, which can be gathered in a short amount of time. Next to this, the possibility of unexpected findings fits perfectly to an explorative research. For this study the roadmap of Assema et al. (1992) has been used (Appendix 1). In addition to the focus group session, an expert-interview has been held. To gain knowledge about a certain topic, expert interviews can be used in order to collect high quality data (Dorussen et al., 2005). This additional data is used to increase the validity and reliability of the research. In order to steer the interview in the right direction but not steering the answers, the method of a semi-structured interview was used.
3.2. Analysis
A focus group session and expert interview were held. The group size of focus groups generally consist of 7-10 individuals (Assema et al., 1992), therefore the aim was to create a focus group in this study consisting of a minimum total of seven persons (n=7) (see Table 1). When using focus groups it is important that the participants are related to the topic (Assema et al., 1992). Therefore, the individuals who participated in the focus groups were selected for their (in-)experience with or (des)interest for electric vehicles. A division was made into four different categories of subjects, each consisting of two individuals. A short description of these individuals can be found in appendix 2.1. The categories are:
- Currently driving a combustion engined vehicle (CEV), and open to buying a Battery Electric Vehicle (BEV). Further addressed as CEO1 and CEO2;
- Currently driving a combustion engined vehicle (CEV), and not open to buying a Battery Electric Vehicle (BEV). Further addressed as CEN1 and CEN2;
- Currently driving a Hybrid Electric vehicle (HEV) or Plug-in Hybrid Electric Vehicle (PHEV). Further addressed as HEV1 and HEV2;
- Currently driving a Battery Electric Vehicle (BEV). Further addressed as BEV 1 and BEV2. For the expert interview, a representative of the Dutch AA (ANWB) has been interviewed. This person can be considered as an expert on electric driving in the Netherlands, as he has done multiple consumer researches on the topic in the past decade. He will be further addressed as ‘expert’ or EXP.
Table 1: Interviews
Nr of Participants Location Type
7 Online Focus Group
The idea of a focus group is that the participants interact with each other after the researcher has proposed a statement. This is stimulated by the different perspectives of the participants, who might adjust their ideas during the discussion (Assema et al., 1992). During the focus group sessions of this study, a number of statements were introduced in order to create a vivid discussion among the participants. Before the discussions were initiated, the scope and purpose of the study were elaborated to the participants. This was done in order to steer the discussion in the direction which fits to the aim of the study. The discussions were recorded and decoded afterwards, creating a set of different opinions and ideas about EVs from the discussants. The same has been done for the expert-interview. Because of the current situation regarding the Covid-19 pandemic, the focus group session and expert interview were held in an online environment in order to comply with the regulations compelled by the government (minimize unnecessary movement and work from home if possible). The online environment that has been used for the focus group session and expert-interview is Google Meet, which provides the option of having eight persons in one session. Also most people have a Google account which allows them to easily join the sessions, without having to perform too many undesirable actions (e.g. creation of a new account), which possibly results in a rejection of participation.
4. Results
In this part the newly gained insights from the focus group session and expert interview will be discussed. The corresponding transcripts can be found in the Appendices (Appendix 2.3: Focus group; Appendix 3.3: Expert-interview).
4.1. Adoption Process
When it comes to the adoption process of consumers, there are several aspects that influence this process. In this paper a selection of them has been made.
The first aspect is related to the ‘scariness’ of a new and ‘unknown’ technique. In the case of EVs this implies the new way of propulsing a vehicle, namely by using an electric motor instead of a combustion engine. It appeared that those who have no experience with EVs did not think of the new and ‘unknown’ technique as scary or more frightening than the ‘known’ technique of CEVs. The shared thought was that “… a car drives as a car” (CEN1). The EV drivers even stated that the first drive in an EV “ … was a more pleasant feeling … ” (BEV2) compared to the first drive in a CEV. This had to do with the predictability of the car, as its “ … power delivery is one on one ” (HEV1). Though, it is mostly dependent on the type of car and the way one drives it. The expert confirms all of the previously mentioned aspects and adds that “… most people [who have driven an EV] think of an EV as being more simplistic and likeable compared to a CEV ”. According to him the unknownness does exist for consumers, only this is not related to the driving but more to the purchase process itself. Because it uses a new technique, consumers “ … don’t know what to look for with an EV ” (EXP). This can make the experience of the purchase process scarier. The scariness also emerges from the gadgets and aids which are currently fitted into cars, including new CEVs. EVs are fitted to the maximum with them, which makes them “… a computer on wheels … ” (BEV2) and asks for trust from the user. This is experienced as “ … more frightening …” (BEV1) the first time one is confronted with it, but becomes normal as one gets used to them.
Even though these ‘extras’ of the EVs require some kind of learning, the driving itself does not, according to the ones who drive an EV. Also the CEV drivers do not expect that much learning is required to be able to drive EVs. According to the expert, the driving of an EV is “ … much easier and calmer” than the driving a CEV, but requires a little getting used to.
The development rate of EVs is currently very high, as their capabilities keep growing. Though, this is not a reason for not buying one for everyone: “ … you can just buy a car, because it works ” (CEO1); “… you need to get a car if you need one now” (BEV1). On the other hand, “if you don’t need one [a new car], you shouldn’t buy an EV ” (BEV1). The CEV drivers all agreed on the rate of development being too high to buy an EV now. Their considerations were on the limited amount of choice compared to the range of CEV models available, but also the possibly fast depreciation of the current EVs due to the quick developments: “ What will this do to the value of my car? ” (CEO2). Their expectations of dropping prices and increasing choice makes them “ … wait out the developments for a bit, before … buy[ing] a new car ” (CEO2). According to the expert, “ this [feeling] … is experienced by a large group ”, but has its downside as “ … the fiscal advantages of the government are also based on this[developments and dropping prices]”. To discourage procrastination, subsidies are issued now. But when prices drop, these subsidies will drop accordingly, making the rationality of the decision questionable. Moreover, the depreciation seems to be on the same level for EVs and CEVs, and “ … it even passed the diesel cars” (EXP).
of “… R&D expenses … calculated into the sales prices ” (BEV1), making them more expensive. All participants but one EV driver, stated that the only reason EVs drive around as much is “ … because these cars are heavily subsidized” (HEV2) by the government and the favourable regulations for the business drivers: “… I get this car as a lease car, because if I hadn’t I wouldn have chosen an EV ” (CEO1). This is confirmed by the expert, who states that the price “ … is the most important reason (by far) why people do not buy an EV ”. This is decreasing as new and lower priced EVs are entering the market.
Buying an EV forces one into making some additional expenses. Driving an EV mostly implies having to buy a charging facility for at home (around €2.000), but the operational costs are lower “ … like maintenance costs … and driving taxes ” (EXP). To make the charging economical though, it is recommended to install solar panels, as prices of public or fast chargers are substantially higher. So an EV does ask “… for some [upfront] investments, but these will be recouped” (EXP).
The home charger is important, as “ it’s important to start your day with a full charge at home ” (BEV1). According to the EV drivers, this is part of “ … the mindset …” (BEV2) that is needed to drive an EV without having to wait in line for a public charger. The importance for EV drivers lies in the question “… can I reach my destination? ” (BEV2), instead of the thought “ … I need to wait half an hour before it’s fully charged …” (BEV2). The only issue with at home charging are the rural areas with high rise buildings where “… the option of charging at home is not always there ” (CEN1). Most non BEV drivers have no experience with fully electric driving yet, but do have the feeling “ … that there are too few [charging] facilities” (CEO2). The most scepticism comes from the idea that just a small part of the car users drives an EV: “ … but when the amount of EVs grows quickly there will be way too few” (CEN1). Therefore the infrastructure of charging facilities needs to grow accordingly. This is confirmed by the expert who states that this (too few charging facilities) is “ for consumers the second or third reason why not to buy an EV” . Though, “… EV drivers do not feel this way ” (EXP). The fact is that “ … four years ago there was one public charger per EV. Now this is closer to one public charger per four EVs, and in the near future this gap only increases ” (EXP). Because of this non linear growth, this is a real and still growing problem.
Next to the charging facilities, the participants were also sceptic about the status of the current power grid. “The delivery of energy by the grid isn’t capable of meeting the demand when every-one drives an EV (as there are already problems with the delivery)” (CEO2). This is a known problem with the government and is currently lacking enormously” (CEO1).
4.2. Sociological Aspects
When buying a car it appears that family members almost always have something to say in this decision as almost all participants experienced this: “ With investments like this we decide together …” (HEV1). Only when it concerns a business car, this is not the case: “ For business drivers this isn’t as important” (BEV1). This is confirmed by the expert who states that “ the social environment does influence the car you are driving”, which includes family, but also one’s direct environment (like neighbours or colleagues). “… people in the environment of one who doesn’t care about EVs also don’t care about EVs. And the same goes for people who are positive or don’t have an opinion about EVs.” (EXP).
promote himself” (CEO2). Though on the other hand the EV drivers didn’t think the CEV drivers should be forced to drive EVs. “ I think we need to get back to a certain balance, more natural ” (BEV2). The expert adds, that “when asking people what the main reason is to buy an EV, the main reason still concerns the environment”.
All participants also agreed that EVs have been seen as status symbols from the beginning, “ … but I think it’s getting less” (HEV2). As more types of EVs arise, which include EVs for people with a smaller budget, the status symbol belonging to them disappears more or less. All in all “ cars in itself have always been status symbols …” (CEN1), where status “… is purely dependent on the type ” (HEV1). This isn’t different for EVs from CEVs: “In the beginning the Tesla was a status symbol to me, but the Renault Zoe on the other hand is not a status symbol to me ” (HEV1). According to the expert this has to be nuanced a bit: “ I see the car as a status symbol, when it is used to show others how good your business is going ”. An EV doesn’t show this anymore, but it can render two things. Firstly, its business driver “… drives a lot and wants to drive as cheap as possible ” (EXP). And secondly, its private driver wants to show “ … what one stands for (and is prepared to pay for) . So in that sense the EVs are status symbols. Not to show how rich you are, but more to show what you stand for in society” (EXP).
An important determinant in this case could be the brand of the car. All but one of the participants agreed on the brand playing an important role in their purchase decision. For EVs this is becoming more relevant as there are more brands bringing new (and cheaper) types on the EV market. The EV expert states that “ …brands do play an important role. ... we see a change emerging in this . … . The traditional manufacturers do have some electric models, but their specifications aren’t that great (they only have their brand left). And EV consumers tend to look more at specifications (radius, seats and charging pace) than to the brand ”. The importance of the brand might reemerge when EV manufacturers are able to distinguish themselves from others again.
4.3. Driving Pleasure
The participants find driving pleasure in different things. The BEV drivers find pleasure in driving a “… safe …” (BEV2) car, and from “… reliability. That the car is working and doing things properly … is nimble … have a lot of gadgets ” (BEV1). For the PHEV driver, the pleasure “is dependent on the mood I am in. … . A hybrid enables you to choose yourself [electric or not] ” (HEV2). When wanting excitement they choose the combustion engine, and “when you want to drive relaxed, you put it in electric mode” (HEV2). The CEV drivers find their driving pleasure in different things. The business driver expects the car to be comfortable: “ … sitting comfortably and get to my destination well-rested (CEO1). Whereas the ‘car-minded’ driver wants to be “ Working to drive ” (CEN1) in order to enjoy driving. This implies shifting gear, steering and having a nice acceleration, while still being reasonably comfortable.
of EVs, as people tend to choose the safe option because they know that it will bring them driving pleasure” (EXP).
For some, the height of the investment for a car is in line with the driving pleasure that is derived from the car. If this is a direct effect is to be doubted though, because “ … the more expensive the car, the prettier” (HEV2) and “… the more the car has to offer … ” (BEV1). This also goes for the way it drives, as “ … the more expensive one, is probably the better driving, faster, more luxurious ” (BEV1). On the other hand, one can experience the greatest pleasure from driving a cheap car (for example when it's one's first car). “… I enjoy this [cheaper] one way more, because this one lets you drive more” (CEN1). The expert thinks “… this differs per ‘group of people ”, as some might experience this and others derive driving pleasure from other things.
4.4. Future of Driving
The future of driving is still unsure for consumers. Some think the EV is the car of the future, while others think EVs are just a transition which is needed to make change possible. They don’t believe that EVs are the future of driving, and expect hydrogen to be the future fuel source. And finally there are some who think the CEV will become so economical, that it will beat the EV. All of these power sources have their own advantages and disadvantages, but there is still too little knowledge about them. According to the EV expert, the future of hydrogen is to be doubted as current figures show that the technology isn’t economically interesting. He expects that EVs will be the cars of the future.
4.5. Incentives for Electric Driving
5. Discussion
The results discussed in the previous chapter have shown several new insights, which will be compared with the existing literature. In this chapter this comparison will be covered, which will result in a number of propositions regarding the purchase process of consumers in the EV market. Next to that, a distinction will be made between three types of consumers in the EV market.
5.1. Adoption of EVs
From previous literature it appeared that the adoption process regarding EVs was subject to several issues. One of these issues considered the unfamiliarity of the new technique - electric propulsion and charging - that is used in EVs. Contrary to most literature though, the results suggest that this feeling of unfamiliarity does not exist among the consumers. This has to be elaborated as there are two sides to this, which concern the driving and the purchase process of EVs. The driving of an EV is not experienced as scary - “a car drives as a car” (Appendix 2.3, p. 33) -, but rather as easier and more pleasant. The purchase process however, has become ‘scarier’ in the sense that people don’t know what to look for with the new technique. Therefore it seems that the unfamiliarity does influence one’s ideas about the purchase process of the product. As a result, the following is proposed:
Secondly, existing literature has considered the price as a big issue in the adoption process of EVs. The results show that this is still the case. Even though the operational costs of EVs are lower and the reason behind the high selling prices is known, consumers still consider the selling to be too high. Indeed, this is considered to be the main reason (by far) for consumers not to buy an EV. But EVs are still being bought. The reason behind this are the governmental subsidies and financial attractiveness for business drivers. This results in the following propositions:
Thirdly, in previous literature it is mentioned that the infrastructure of charging facilities is the main determinant in the choice whether to buy an EV or not. This is partly confirmed by the results, as a difference exists between the mindsets of EV drivers and non-EV drivers. The EV drivers experience
Proposition 1A:
“The effect of the unfamiliarity of the new technique - in terms of usage - on one’s attitude towards the purchase of EVs is neglectable.”
Proposition 1B:
“In the purchase process of EVs the unfamiliarity of the new technique negatively influences one’s attitude towards the purchase behaviour.”
Proposition 2A:
“The relatively high prices negatively influence one’s attitude towards the purchase of EVs .” Proposition 2B:
the amount of public chargers as sufficient, because filling up a car is different for EVs from CEVs (home charging is most important for EVs). The non-EV drivers on the other hand have the feeling that the amount of charging facilities is too little, which also keeps them from switching to EVs. Numberwise, the second group is currently right, as the amount of public chargers per EV is far below 1 and is a growing problem. This problem creates resistance among potential customers. Therefore the following is proposed:
Fourthly, it is stated in previous literature that the rate of development creates a procrastinative behaviour among consumers. This appears to be partly true, as the results show that consumers indeed think that the developments are going rapidly. Because of this high rate, non-EV drivers fear that current EVs will be subject to rapid depreciation (which does not necessarily seem to be true). Moreover, consumers expect that due to these quick developments, the amount of choice (in car models) will grow and prices will drop soon. The EV drivers on the other hand don’t see this high rate as a reason not to buy an EV. As a result the following is proposed:
Finally, the switching costs are seen as a determinant in the adoption of an innovative product. These can consist of financial- and non-financial costs (e.g. learning). From the results it appears that for the adoption of EVs no learning is required, as driving one is the same as driving a CEV (and possibly easier). Regarding the financial costs however, there are some additional expenses necessary to fully exploit the advantages of an EV. These contain a home charger and optional solar panels. So for consumers who want to make the choice of an EV economical, there are switching costs involved. However, the results show that these switching costs are not considered as a reason not to buy an EV for consumers. This results in the following proposition:
Proposition 3A:
“The state of the charging infrastructure is positively related to the intention and attitude towards the purchase of EVs with new/potential consumers.”
Proposition 3B:
“The positive relation between the state of the charging infrastructure and the intention and attitude towards the purchase of EVs is weaker with existing consumers.”
Proposition 4A:
“The high development rate negatively influences the attitude towards the purchase behaviour of EVs with new/potential consumers.”
Proposition 4B:
“The negative effect of the high development rate on the attitude towards the purchase behaviour of EVs is neglectable with existing consumers.”
Proposition 5:
5.2. Sociological Factors
There are also sociological factors involved in one’s decision making process. Firstly one’s social environment, which from existing literature seems to be an important factor in the decision making process regarding EVs. This is confirmed by the results, which show that for example family members have great influence on the purchase decision of a car. This is different between the private and business drivers though, as family does not influence this decision as much when it concerns a business car. But the direct environment of a consumer seems to be of influence, as it appears that consumers adapt their opinion to their direct environment. This results in the following proposition:
Secondly, literature has shown that the brand plays an important role in the decision making process when purchasing a car. In this process, things such as satisfaction, loyalty or innovativeness were drivers of the decision making process. The results show that a brand is indeed considered to be of importance. In the market of EVs however, the brand does not mean that much yet (compared to the market of CEVs). Consumers in this market mainly emphasize the specifications and safety of the car rather than the brand. This is expected to be due to the current lack of different models and manufacturers that produce EVs. The effect of the brand is expected to return when more EVs (models and brands) will appear on the market. Therefore the following is proposed:
Thirdly, according to existing literature, one of the most important sociological determinants in the adoption process concerns the social pressure consumers perceive from others. This concerns the question of how the adoption impacts one’s social acceptance. For EVs this has two lines of thinking. Firstly, environmental friendliness as a means of improving the environment. And secondly, environmental friendliness as a means of showing off and obtaining status. The results show that both lines of thinking are true, but differ among people. For most people environmental friendliness is the main reason to buy an EV, giving them the feeling they are doing the right thing. Whilst others only buy an EV to show they can (this is getting less for EVs). As a result the following is proposed:
Proposition 6:
“The opinions in one’s direct social environment are congruent with one’s own opinion on EVs.”
Proposition 7:
“In the early stages of the product life cycle, the brand does not influence one’s attitude towards the purchase of EVs.”
Proposition 8:
“The environmental friendliness an EV renders positively influences one’s opinion of EVs.” Proposition 9:
5.3. Driving Pleasure
In previous literature driving pleasure is considered as one of the most important characteristics of a car, therefore this is an important factor in the decision making process when purchasing a car. As cars are high involvement goods, the purchase process relies on heavy research in order to make the best choice. Next to that, it is mentioned in previous literature that the height of the investment also influences the driving pleasure (the higher the investment, the more driving pleasure is experienced). Literature therefore suggests that driving pleasure is a result of affective and financial components, which influence one’s decision making process when purchasing a car. The results show that for some the driving pleasure is indeed a key determinant in the decision making, while for others factors such as looks were more important. The direct effect of price on driving pleasure however, is to be doubted. Because ‘the more you pay, the more you get’, and also cheap cars can bring the greatest driving pleasure. Therefore the following is proposed:
5.4. Future of Driving
As there is no consensus on the future of cars, this also influences the decision making process when purchasing a car. There is currently very little and diverse information on the new techniques, which can create mixed feelings among consumers. Therefore the final is proposed:
5.5. Consumer Profiles
When examining the results, a division between different types of consumers shimmers through. A distinction in mindsets and ideas can be used in order to show what these types are. As their mindset and ideas are different, so are the effects of the factors influencing the decision making processes. It is therefore wise to include this existing difference.
In the table below (table 2: Consumer Profiles), three different profiles are made. Profile one consists of the BEV drivers, who are experienced with the usage and driving of EVs. Profile two consists of (P)HEV drivers and CEV drivers who have some experience with electric driving. Profile three consists of the CEV drivers who have little or no experience with electric driving.
Proposition 10:
“The driving pleasure positively influences one’s attitude towards the purchase of a car.” Proposition 11:
“The height of the investment does not directly influence the relationship between driving pleasure and one’s attitude towards the purchase of a car.”
Proposition 12:
Table 2: Consumer Profiles Profile 1:
High experience with electric driving
Profile 2:
Some experience with electric driving
Profile 3:
Little/no experience with electric driving Considers new technique
as ‘frightening’ Opposite No No Thinks/Expects that learning is required No No No Procrastinative behaviour due to a high development rate
No Yes/No Yes
Considers prices of EVs as (relatively) too high
Yes/No Yes Yes
Considers charging infrastructure as lacking
No Yes/No Yes
Considers EVs as symbols of environmental
friendliness
Yes Yes Yes
Considers EVs as status symbols
Yes Yes Yes
Considers the brand as an important factor
Yes/No Yes Yes
Considers driving pleasure as one of the most
important factors
