Barriers and Strategies for Transition to Electric Vehicles in BRICS Countries

Abstract

BRICS countries are considered to be five countries with important roles worldwide. These countries nearly account for half of population in the world, with economic growth exceeded the growth of industrialized countries. Therefore, these countries become an interesting target markets for all sorts of technologies, including sustainable technologies. One of the prominent issues related to sustainable technologies is the high level of carbon emission, one of which is a result of transportation sector. Electric vehicles are perceived to be a solution to reduce carbon emission from transportation sector. With high population and high economic growth rate, BRICS countries also contribute to the global carbon emission. It is then interesting to see if electrical vehicles could be adopted in BRICS countries. Hence, this research aims to identify barriers to adoption of electric vehicles in BRICS countries and investigate how companies deal with these barriers. For further understanding, this research discusses the relationship between barriers and strategies. This research also investigates the relative importance of barriers and strategies based on the case study to identify if the companies have similar or different perspective on the barriers and strategies. This research is conducted in three steps; first step covers the current literature of barriers and strategies in general, using the literature of barriers and strategies for new high tech products as well as barriers and strategies for sustainable technologies. The second step covers the current literature of barriers and strategies in BRICS countries. Both steps generate the pre-specified list of barriers and strategies that are used for the third step, which is the case study to investigate whether the barriers and strategies from the list are occurred and if there are other barriers and strategies. The case study covers three different companies from three different countries, which are Nissan in South Africa, Mahindra Reva in India, and Renault in Brazil. The outcome of this research is the total 13 barriers, which are Production system; Complementary technologies; Network; Demand; Institutional; Technological; Natural resources and labour; Social, cultural, behavioural, and psychological; Macro-economic; Accident or events; Infrastructure; Financial; and Undesirable societal and environmental effect. It is discovered that demand, institutional, and infrastructure barriers as the most important barriers from the three companies’ perspective. Moreover, this research also result in the total of 15 strategies, which are Demo, experiment, and develop niche strategy; Top niche market strategy; Pilot project strategy; Lobbying strategy; Redesign niche strategy; Dedicated system or stand-alone niche strategy; Hybridization or adaptor niche strategy; Knowledge development’ Geographic niche strategy; Market research; Explore multiple markets niche strategy; Financial aid strategy; Establishment of standard strategy; Network creation strategy; Development of infrastructure strategy. It is discovered that lobbying and development of infrastructure strategies are the most important strategies to support the adoption of electric vehicles in BRICS countries. Lobbying strategy is important to get government support in order to accelerate the adoption of electric vehicles. The development of infrastructure is also important in order to provide the customers with sufficient public charging stations and eliminate range anxiety. The relationship between barriers and strategies are also discovers during the case study phase of the research. Specific strategy is implemented to tackle specific barrier, but more supporting strategy could also be implemented to gain more benefit or higher impact. However, the amount of resource dedicated for the supporting strategies might be less than its main strategy. Furthermore, one strategy could also be implemented and overcome more than one barrier. For example, lobbying strategy to get government support can overcome both demand and infrastructure barrier, depends of what kind of advocacy or lobbying done by the companies. It is also discovered that barriers can change overtime, depend on the current situation of the companies as well as the countries. Country that imports their cars might not experience technological and production system barriers, but once the production is established within the country, these barriers might occur and possible to be the most important barriers. Moreover, changing macro-economic situations could also result in different perspective of how macro-economic pose as a barrier in the country. It is understandable that in countries with unstable macro-economic condition, companies will consider macro-economic barrier to be important. However, once the macro-economic condition is stabilized, it is possible that the company will consider the macro-economic barrier as not exist. Macro-economic condition also affects government’s support for adoption to electric vehicles. The three countries investigated experience difficult macro-economic conditions; hence adoption to electric vehicles is not considered as top priority by the government, resulting in limited support from the government in adoption to electric vehicles within the countries. Lastly, findings in this research can be important for both managerial and academic perspective. For managerial perspective, this research can serve as a tool in deciding when to enter the electric vehicles market in BRICS countries as well as what kinds of barriers to be expected in the countries. This research could also serve as a tool in identifying appropriate strategies to be implemented in order to overcome the barriers. As for academic perspective, this research offers several possible further researches in relation with this field of research, such as government’s point of view and strategies for adoption of electric vehicles (or other sustainable technologies) in developing countries, investigation for dynamic nature of barriers which then would affect the changes in strategies, collaboration of triple helix industry – government – university to accelerate adoption of electric vehicles in developing countries, and comparison study between developed and developing countries to serve as a knowledge and learning possibility for developing countries.