The transportation sector is one of the most polluting sectors in the world. Even though alternative fuel vehicles have been around for decades, they only have a very small share in the vehicle market. Since firms are early adopters of new technologies and can trigger mass adoption, we investigate the factors affecting their decision to purchase sustainable vehicles and to green their vehicle fleets.
Alternative fuel vehicles, such as electric, hydrogen or biodiesel vehicles, can have a positive impact on the sustainability of the transportation sector by reducing carbon emissions and air and noise pollution. To realise these positive effects, alternative fuel vehicles need to increase their market share. In 2017, their global share was only 4.4 percent of the total number of vehicles in circulation. We argue that commercial fleets can play an important role in the diffusion of alternative fuel vehicles, because more than half of all the vehicles on the road today are owned by firms. Since firms drive higher mileage than individuals and buy vehicles in bulk, they can make a substantial contribution to a more sustainable transportation sector by increasing the number of alternative fuel vehicles in their fleets. Our study highlights the factors enabling and hindering firms to green their vehicle fleets.
Technology Adoption Models
Over the last decades, different technology adoption models have been developed to explain the diffusion of technologies. In our study, we integrate these models to develop a comprehensive framework that classifies the factors affecting Firm Adoption of Sustainable Technologies (FAST). We combine our FAST framework with a systematic review of the literature on alternative fuel vehicles to identify the enablers and barriers of green vehicle fleets.
Enablers of Green Vehicle Fleets
One of the main enablers of green vehicle fleets is performance expectancy, which is the perception that the technology will increase employees’ or firms’ performance. Employees believe their productivity and efficiency increases when they use alternative fuel vehicles. They appreciate the better acceleration and lower noise of the vehicles. Firms experience lower energy and maintenance costs and they green their fleets to advertise their corporate social responsibility achievements. The latter illustrates that social influence also stimulates adoption. Firms use alternative fuel vehicles to communicate a green image to external stakeholders and internally to their employees. Another external factor that reduces the costs to firms of adopting green alternatives is government policy including subsidies, low registration fees, low emission zones and highway toll exemptions. A key enabler of adoption of alternative fuel vehicles is the ability to test the technology through field trials, demonstrations and pilot projects. Employees who test alternative fuel vehicles have more positive subjective norms and attitudes. When they build more knowledge on the new technology, they reduce their uncertainty and decrease cost for the firm by delaying charging of the vehicle and making longer trips.
Barriers to Green Vehicle Fleets
One of the main barriers to green vehicle fleets is effort expectancy, which refers to factors that hinder the ease of use of the new technology. Examples include limited driving range, inadequate charging infrastructure, long charging times, lack of charging standards and limited availability of task-appropriate alternative fuel vehicles. The limited driving range and long charging times are important barriers for bus companies and taxi firms operating on strict time schedules. Additional barriers to adoption are high capital investments, limited knowledge of sustainable vehicles, and limited awareness of the negative environmental impact of combustion engine vehicles. Small firms are also less likely to adopt alternative fuel vehicles, in particular when they have autocratic decision-making structures in which the owner or manager makes all the decisions and does not reserve time for acquiring knowledge of alternative fuel vehicles.
Mass Adoption of Green Vehicles?
Innovation theory has taught us that early adopters of new technologies can trigger mass adoption: the more they adopt the new technology, the more others have an incentive to adopt as well. Our research shows that large firms can play the role of early adopters, because they are less affected by adoption barriers and experience more enabling factors. Large firms are more willing to accept the financial risk of a new technology, they can cope with operational risk by building their own charging infrastructure, they have better access to knowledge of alternative fuel vehicles, they are better equipped to train their employees, and they have more resources to invest in greening their fleets. If stakeholders could convince large firms of the economic benefits of acting as an early adopter of alternative fuel vehicles, they could trigger a transition to a more sustainable transportation sector. Internal stakeholders, such as employees, reward sustainable firms with higher productivity, while external stakeholders, such as consumers, impact investors, policy makers and non-governmental organizations, attribute a higher legitimacy to sustainable firms resulting in a positive impact on firms’ stock prices.
Mohammed, L., Niesten, E., and Gagliardi, D. 2020. Adoption of alternative fuel vehicle fleets – A theoretical framework of barriers and enablers. Transportation Research Part D: Transport and Environment, 88. DOI: 10.1016/j.trd.2020.102558