Aug 10, 2022

It’s All in Your Head: How Cognitive Bias is Holding Up the Electric Car Market

Energy Transition
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We may not have flying cars yet, but we do have electric cars. With no major financial and technological obstacle, what’s holding up the rise in their market share?

A team from the University of Geneva (UNIGE) sought to answer this very question, investigating the cognitive factors that still dissuade many people from switching to electric cars. In short, they found that car owners systematically underestimate the capacity of electric driving ranges to meet their daily needs.

The increase of greenhouse gases in the atmosphere is one of the main causes of global warming. Among these gases is CO2, of which the transport sector is one of the main emitters. Fossil fuel vehicles alone account for nearly 18% of global CO2 emissions. The electrification of the vehicle fleet has therefore become one of the most pressing challenges of the ongoing energy transition.

The number of electric vehicles is increasing in many countries. However, they are still far from having the market share that would allow a significant reduction in road traffic emissions: In 2020, they represented only 1% of the global vehicle fleet, including hybrid vehicles. To meet the 2030 climate targets, this proportion needs to reach at least 12%.

It's (almost) all in the head

With more affordable purchase prices, financial incentives, and denser network of charging stations: what factors continue to block widespread adoption of electric vehicles? A large part of the answer lies in the cognitive biases of drivers.

"Until now, initiatives related to the energy transition generally focused on the technological and financial barriers to their realization. Psychological factors have been given very little consideration. However, many studies show that individuals do not automatically adopt the behaviours most beneficial for themselves or society, often due to a lack of access to complete information," explained Mario Herberz, first author of the study and researcher at the Consumer Decision and Sustainable Behavior Laboratory of the Department of Psychology at the Faculty of Psychology and Educational Sciences of the UNIGE.

Tailored information: the answer

After interviewing more than 2,000 car drivers in Germany and the United States, the researchers identified one source of the cognitive biases that were holding them back from adopting an electric vehicle: participants systematically underestimated the compatibility of electric battery capacities available on the current market with their actual needs.

In other words, consumers inaccurately believed that current batteries for electric cars would not sufficiently cover their daily transportation needs. At around 30%, this underestimation is substantial.

The sweet spot

The research team found that more than 90% of car trips could be completed with vehicles with a driving range of 200 kilometers, a modest range among the currently available batteries.

"The trend is to increase performance, but we have observed that a greater range, beyond 300km for example, does not increase the fit to daily needs. It would only have a minimal impact on the number of additional trips that can be completed with one electric charge. Increasing the size of the batteries is therefore not a key element in the energy transition," remarked one of the researchers.

This research, partly financed by the Swiss Federal Office of Energy, demonstrates the importance of psychological factors and access to relevant information when implementing the energy transition.

August 10, 2022

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