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The global transition towards electric vehicles (EVs) is essential for addressing climate change, improving air quality, and reducing reliance on non-renewable energy sources. Despite the urgency, the adoption of EVs has been slower than anticipated, influenced by factors such as high initial costs, concerns over battery life and charging infrastructure, and broader economic uncertainties. A key factor in the adoption of EVs is the Total Cost of Ownership (TCO), which encompasses various financial considerations impacting the long-term economic viability of EV ownership. This study examines how TCO affects the adoption rates of EVs among business and private customers by using a qualitative research methodology with interviews of professionals.
The findings indicate that TCO can play a crucial role in the decision-making processes of business customers as they transition from internal combustion engine (ICE) vehicles to EVs. TCO can serve as a financial assessment tool and a strategic lever for negotiation, though its influence varies based on factors like company size, vehicle brands, and specific intended uses. In the case of private customers, the study reveals that while they may recognize certain cost advantages of EVs, they often lack a full appreciation of the comprehensive TCO due to a focus on upfront costs and insufficient consumer education about the long-term economic benefits of EV ownership. Nevertheless, the research underscores a gap in consumer understanding of TCO. The study also identifies a disparity in how car manufacturers equip their salesforces with TCO information to engage with business and private customers. In the business-to-business (B2B) segment, salesforces are knowledgeable and effectively utilize TCO to communicate the long-term financial benefits of EVs. Conversely, in the business-to-consumer (B2C) segment, salesforces are less equipped and motivated to utilize TCO in their sales pitches, focusing more on immediate costs and features attractive to personal users. Additionally, while some car manufacturers are considering online TCO calculation tools to enhance transparency, they remain cautious due to concerns about deterring buyers.
Overall, the study demonstrates that while TCO can influence decision-making among B2B clients, it remains uncommon and is rarely utilized in the B2C segment. Given the increasing shift from ownership to leasing models, focusing on the Cost of Use could provide more relevant insights for electric vehicle adoption.
