Modelling diffusion of innovations: various consumers in electric vehicle adoption

1. Modelling diffusion of innovations: various consumers in electric vehicle adoption Dr. Marija Bockarjova (VU / RUG) Prof. dr. Linda Steg (RUG) 10th Biennial Conference on Environmental Psychology Magdeburg, Germany 22-25 September 2013

2. Abstract Pressing concerns about environmental degradation and energy security are the main drivers of a renewed interest in alternative fuel vehicle technologies all around the globe, and in full electric vehicles (EVs) in particular. This has resulted in multiple approaches dedicated to modeling EV adoption. However, provided a heterogeneous diffusion process where consumers vary in psycho-demographic characteristics, little effort has yet been devoted to identification of consumer segments. In this paper, we provide a first attempt at identification and description of such segments that are representations of ideal types such as described in the theory of diffusion of innovation. We use data from a large-scale internet survey among Dutch drivers collected in 2012. We were able to identify five consumer segments and found that in conformity with theory, such characteristics as knowledge about alternative vehicle technology and consumer innovativeness decrease smoothly across the segments as we move from the Innovators and Early Adopters to Early Majority, Late Majority and Traditionalists. We also find that these segments differ in their evaluation of an EV, intention to adopt and general acceptability of the vehicle. Implications for research and practice are provided.

3. Structure • Background and motivation • Methodology and procedure • Empirical study • Measurements • Results • Discussion, Conclusions, Implications

4. Background

5. EV Adoption: Innovations Perspective • EV as atechnological and eco-innovation • A variety of an existing good • A technological innovation: • New driving practice • New charging routine • Energy storage • An eco-innovation: • Environmental advantages (air quality, noise, CO2 emissions) • Decreased oil dependency

6. EV Adoption: Innovations Perspective • Innovation lifecycle as a multidimensional dynamic process • Consumer heterogeneity • Distinctive groups with varying socio-ec. and psychological profiles, preferences and purchasing patterns • Product evolution • Improvement of product qualities • Market dynamics • Product quantities sold and produced • Influences in social networks • Temporal dynamics • Simultaneous dynamics of consumer, product and market dimensions • Spatial dynamics • Spatial amplification of diffusion process

7. Consumer heterogeneity: literature • Many studies analyse introduction of eco-innovations and environmentally-friendly products to the market in a ‘static’ way • Organic food & clothes • Alternative vehicles • … • Not many take dynamics of consumer heterogeneity explicitly into account in applied studies • Stages of change (Bamberg, Kloekner, Dijkstra) • Ad hoc consumer types (German study, Axsen on EVs) • Innovativeness (Vandecasteele & Geuenes (2010))

8. Goal of the study Based on the Diffusion of Innovation Theory (Rogers, 2000), identify consumer segments for EV adoption and validate them w.r.t. central theoretical concepts; predict EV adoption on the segment level Central concepts: • General consumer innovativeness • Knowledge about the alternative fuel vehicle (AFV) technology

9. Diffusion of Innovation Theory Rogers (2000):  Innovation – innovative product  Communication channels  Social context  Time dimension  Consumer segments  Stages of change  Rate of adoption

10. Diffusion of Innovation Theory testing • Benefits for result applicability: • Ability to construct a dynamic adoption strategy targeting key antecedents of a particular consumer segment at a particular stage of adoption Challenges for empirical studies: • (ex-ante) consumer segment identification

11. Methodology

12. Procedure for consumer segment identification Segment diagnostic: • descriptions of consumer types in the context of buying of an innovative vehicle Segment validation: • General consumer innovativeness(Vandecasteele and Geuens (2010) and Jager (2009)) • Knowledge about alternative vehicle technology Modelling EV adoption: • PMT framework to predict adoption • Various predictors for various consumer segments

13. Questionnaire • June 2012 • Internet survey (ab. 30 min) • Existing commercial panel (N = 2,974) • Representative sample of Dutch drivers / population • Age • Education • Gender

14. Empiricalstudy:measures

15. Identification of Consumer Segments Imagine that you are going to buy a new car. Which of the following narratives describes you best?(choose one of the following statements) (INN)I am a type of person who closely follows new technological developments and who dares taking risks by being the first one to purchase an innovative vehicle. (EA)I am a type of person who envisions potential advantages in an innovative vehicle and who is one of the first to make use of these advantages and to profit from those. (EM) I am a type of person who is interested in innovative vehicles but at the same time is pragmatic. First I would like to take time and be persuaded about the advantages that an innovative vehicle possesses. My decisions are (mainly) based on the recommendations of existing users. (LM)I am a type of person who is not thrilled by innovative vehicles, but who rather appreciates security. It is safe to purchase an innovative vehicle when it has been on the market for some while and offers obvious advantages. (TR)I am a type of person who has little affiliation with innovative vehicles; such vehicles should first prove themselves on the market. I do not like change and I purchase an innovative vehicle only when the existing model is not produced anymore.

16. General innovativeness Measures • innovativeness of individuals with respect to purchase, possession and use of innovative products in general • four dimensions • GENERAL INNOVATIVENESS • (12 items, 6-point scale) • M = 2.419; SD = .965; alpha =.932

17. General innovativeness • GENERAL INNOVATIVENESS • (12 items, 6-point scale) • M = 2.419; SD = .965; alpha =.932 • HEDONIC • (4 items) • M = 2.791 • SD = 1.167alpha = 0.900 • SYMBOLIC • (4 items) • M = 2.241 • SD = 1.098alpha = 0.898 • SOCIAL INFLUENCE • (2 items) • M = 2.198 • SD = 1.053alpha = 0.727 • INFORMA-TIONAL • (2 items) • M = 2.253 • SD = 1.224 • alpha = 0.907 Enjoyment connected to purchase / use / possession of an innovative product An innovative product that distinguishes me from others Others take account of my approval of an innovative product Others consult me on innovative products

18. Knowledge about AFV technology Measures • subjective knowledgeabout alternative vehicle technology and its advantages and disadvantages relative to conventional fuel technology; • abilitytoexplain the differencesbetween AFV and CV. • KNOWLEDGE ABOUT AFVs • (3 items, 6-point scale) • M = 2.980; SD = 1.293; alpha =.912

19. EV adoption measures • EV EVALUATION(1 item, M = -0.6, SD = 2.44) measures individual overall evaluation of EV’s advantages and disadvantages • INTENTION(3 items, M = 2.83, SD = 1.26, α = .83) measures individual interest in an EV and intention to consider EV as one of the options when buying a next car, and to buy an EV • EV ACCEPTABILITY(1 item, M = 4.22, SD = 1.51) measures individual acceptability that in the long-run EVs should replace fossil fuel vehicles • Policy ACCEPTABILITY(4 items, M = 4.62, SD = 1.18, α = .90) measures individual acceptability of policy facilitating EV purchase and use

20. Empirical results: SEGMENT DESCRIPTION

21. Consumer segments EV adoption study

22. Innovativeness and Knowledge per consumer segment Allsegments stat. differfromeachother exc. INN & EA

23. 4 Dimensions of Innovativenessper consumer segment

24. Average scores for EV adoption measures:Overall EV EVALUATION, policy ACCEPTABILITY, INTENTION to buy an EV, general EV ACCEPTABILITY

25. Average scores for EV adoption measures:Overall EV EVALUATION, policy ACCEPTABILITY, INTENTION to buy an EV, general EV ACCEPTABILITY

26. Empirical results: SEGMENT VALIDATION

27. Segment membership modelordered logit

28. Segment membership modelordered logit INNOV.hedonic -.633 Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) n.s. INNOV.symbolic n.s. INNOV.soc.influence -.213 INNOV.informational

29. Segment membership modelordered logit INNOV.hedonic -.633 Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) n.s. INNOV.symbolic n.s. INNOV.soc.influence -.213 -.368 INNOV.informational KNOWLEDGE

30. Segment membership modelordered logit Gender INNOV.hedonic R2 = .353 -.633 n.s. Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) n.s. .016 Age INNOV.symbolic -.458 n.s. Education INNOV.soc.influence -.055 -.213 Income -.368 INNOV.informational KNOWLEDGE

31. Empirical results:MEDIATION IN SEGMENT MEMBERSHIP

32. Segment membership model 1mediation analysis INNOV.informational R2=.449 -.237 -.759 Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) -.206 INNOV.soc. influence R2=.205 -.026 (n.s.) PROCESS. Controls: Age, Education and INCOME

33. Segment membership model 2 mediation analysis INNOV.informational R2=.339 -.113 -.604 Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) -.329 INNOV.hedonic R2=.286 -.261 PROCESS. Controls: Age, Education and INCOME

34. Segment membership model 3mediation analysis INNOV.informational R2=.328 -.157 -.632 Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) -.292 INNOV.symbolic R2=.245 -.193 PROCESS. Controls: Age, Education and INCOME

35. Segment membership model 4mediation analysis INNOV.informational Cons. SEG 1 (INN) 2 (EA) 3 (EM) 4 (LM) 5 (TR) INNOV.symbolic R2=.328 -.109 -.632 -.292 R2=.287 -.020 (n.s.) -.249 -.817 INNOV.hedonic R2=.610 PROCESS. Controls: Age, Education and INCOME

36. Empirical results:EV ADOPTION PER SEGMENT

37. A PMT model for EV adoption

38. PMT Motivators for EV adoptionby consumer segment SELF-EFF-CY EARLY MAJ. SELF-EFF-CY INN. & EA SEVERITY SEVERITY RESP.EFF-CY INTENTION TO BUY AN EV RESP.EFF-CY VULN-TY INTENTION TO BUY AN EV COSTS (ev) VULN-TY REWARDS (cv) COSTS (ev) R2 = .408 BENEFITS (ev) REWARDS (cv) R2 = .431 BENEFITS (ev) SELF-EFF-CY SELF-EFF-CY LATE MAJ. TRAD-STS SEVERITY SEVERITY RESP.EFF-CY RESP.EFF-CY INTENTION TO BUY AN EV INTENTION TO BUY AN EV VULN-TY VULN-TY COSTS (ev) COSTS (ev) REWARDS (cv) REWARDS (cv) R2 = .440 R2 = .376 BENEFITS (ev) BENEFITS (ev)

39. Conclusions

40. Conclusions • Distribution of consumers over the segments in line with theoretical prediction • The average scores of knowledge about AFVs decrease together with progression of adopter segments • The average scores of the four innovativeness dimensions decrease together with progression of adopter segments • hedonic, symbolic, social influence and informational • Knowledge and innovativeness are important determinants of segment membership • dit heb je niet laten zien, dan zou je regressie moeten doen, of zeg segmenten verschillen vooral in…(en dan evt toevoegen als subpunt: geldt voor alle vier dimensies van innovativeness) • There are differences across the segments in EV adoption in the expected direction

41. Thankyou!

42. Additional slides

43. ‘Close’ measures of adoption OVERALL EV EVALUATION Taking everything into consideration, how would you evaluate the advantages of a fully electric vehicle against its disadvantages? Your score may vary between -5 and +5. The meaning of the scores: -5 to -1: an electric vehicle has predominantly disadvantages, 0: the advantages and disadvantages are about equal +1 to +5: an electric vehicle has predominantly advantages. INTENTION(Cr.alpha = .827) Taking everything into consideration, to what extent would you agree with the following statements? (0 = completely disagree; 5 = completely agree) • I would now buy an electric car • I would consider an electric vehicle when purchasing a (next) car • I am interested in an electric vehicle

44. ‘Distant’ measures of adoption General EV ACCEPTABILITY (0 = fully disagree; 5 = fully agree) Taking everything into consideration, to what extent do you agree that electric vehicles should replace fossil fuel vehicles in the long run? Policy ACCEPTABILITY (Cr.alpha = .903) (0 = fully disagree; 5 = fully agree) I find it acceptable that: …policy should be in place in order to stimulate the purchase of electric vehicles …policy should be in place in order to stimulate the use of electric vehicles …purchase of electric vehicles is subsidised (e.g. with a purchase subsidy or a higher exchange value) …use of electric vehicles is subsidised (e.g. with exemption from road tax).

45. Identification of Consumer Segments Imagine that you are going to buy a new car. Which of the following narratives describes you best?(chooseone of the following statements) (INN)I am a type of person who closely follows new technological developments and who dares taking risks by being the first one to purchase an innovative vehicle. (EA)I am a type of person who envisions potential advantages in an innovative vehicle and who is one of the first to make use of these advantages and to profit from those. (EM) I am a type of person who is interested in innovative vehicles but at the same time is pragmatic. First I would like to take time and be persuaded about the advantages that an innovative vehicle possesses. My decisions are (mainly) based on the recommendations of existing users. (LM)I am a type of person who is not thrilled by innovative vehicles, but who appreciates security. It is safe to purchase an innovative vehicle when it has been on the market for some while and offers obvious advantages. (TR)I am a type of person who has little affiliation with innovative vehicles; such vehicles should first prove themselves on the market. I do not like change and I purchase an innovative vehicle only when the existing model is not produced anymore.

46. Knowledge about AFV technology Please indicate for how much you agree with the following statements concerning your knowledge about alternative vehicle technologies (such as fuel cell vehicles, electric or hybrid vehicles). (Items measured on a 6-point scale: 0 – fully disagree to 5 – fully agree) • I have knowledge about alternative vehicle technologies. • I know which advantages and disadvantages alternative vehicle technologies have compared to a gasoline vehicle. • I can explain which differences there are between alternative vehicle technologies and a gasoline vehicle (for example, in terms of environmental effects, functionality)

47. General innovativeness measure The following statements are related to your opinion about innovative products in general. For each of the following statements please mark for how far you agree or disagree with it. (Items measured on a 6-point scale: 0 - entirely disagree to 5 – entirely agree) • I like to own a innovative product that distinguishes me from others who do not own this new product. • Using innovations gives me a sense of personal enjoyment. • I love to use innovations that impress others. • I prefer to try innovative products with which I can present myself to other people. • Acquiring innovative products makes me happier. • It gives me a good feeling to possess innovative products. • I like to outdo others, and I prefer to do this by buying innovative products which they do not have. • Innovative products make my life exciting and stimulating. • People I know are influenced by my acceptance of their purchasing the newest products and brands • People I know often consult me to help choose the best innovative product available on the market. • People I know think it is important that I like the products and brands they buy. • People I know frequently gather information from me about a product before they buy one. • HEDONIC • (4 items, alpha =.900)

48. General innovativeness measure The following statements are related to your opinion about innovative products in general. For each of the following statements please mark for how far you agree or disagree with it. (Items measured on a 6-point scale: 0 - entirely disagree to 5 – entirely agree) • I like to own a innovative product that distinguishes me from others who do not own this new product. • Using innovations gives me a sense of personal enjoyment. • I love to use innovations that impress others. • I prefer to try innovative products with which I can present myself to other people. • Acquiring innovative products makes me happier. • It gives me a good feeling to possess innovative products. • I like to outdo others, and I prefer to do this by buying innovative products which they do not have. • Innovative products make my life exciting and stimulating. • People I know are influenced by my acceptance of their purchasing the newest products and brands • People I know often consult me to help choose the best innovative product available on the market. • People I know think it is important that I like the products and brands they buy. • People I know frequently gather information from me about a product before they buy one. • SYMBOLIC • (4 items, alpha =.898)

49. General innovativeness measure The following statements are related to your opinion about innovative products in general. For each of the following statements please mark for how far you agree or disagree with it. (Items measured on a 6-point scale: 0 - entirely disagree to 5 – entirely agree) • I like to own a innovative product that distinguishes me from others who do not own this new product. • Using innovations gives me a sense of personal enjoyment. • I love to use innovations that impress others. • I prefer to try innovative products with which I can present myself to other people. • Acquiring innovative products makes me happier. • It gives me a good feeling to possess innovative products. • I like to outdo others, and I prefer to do this by buying innovative products which they do not have. • Innovative products make my life exciting and stimulating. • People I know are influenced by my acceptance of their purchasing the newest products and brands • People I know often consult me to help choose the best innovative product available on the market. • People I know think it is important that I like the products and brands they buy. • People I know frequently gather information from me about a product before they buy one. • SOCIAL INFL. • (2 items, alpha =.727)

50. General innovativeness measure The following statements are related to your opinion about innovative products in general. For each of the following statements please mark for how far you agree or disagree with it. (Items measured on a 6-point scale: 0 - entirely disagree to 5 – entirely agree) • I like to own a innovative product that distinguishes me from others who do not own this new product. • Using innovations gives me a sense of personal enjoyment. • I love to use innovations that impress others. • I prefer to try innovative products with which I can present myself to other people. • Acquiring innovative products makes me happier. • It gives me a good feeling to possess innovative products. • I like to outdo others, and I prefer to do this by buying innovative products which they do not have. • Innovative products make my life exciting and stimulating. • People I know are influenced by my acceptance of their purchasing the newest products and brands • People I know often consult me to help choose the best innovative product available on the market. • People I know think it is important that I like the products and brands they buy. • People I know frequently gather information from me about a product before they buy one. • INFORMA-TIONAL • (2 items, alpha =.907)