Barriers and strategies for diffusion of electric vehicles in brics countries

Worldwide, many countries are facilitating the development and diffusion of sustainable energy based technologies. Such technologies reduce CO2 emissions by limiting the use of fossil fuels. An example of such a technology is the electric vehicle. Most diffusion of electric vehicles takes place in industrialized countries, such as the Netherlands and Norway. But also in other countries electric vehicles begin to enter the market. Examples of such countries are the so-called BRICS countries: Brazil, Russia, India, China and South-Africa. These countries account for nearly half of the World population, with economic growth exceeding the growth of industrialized countries. Therefore, these countries become an interesting target markets for all sorts of sustainable technologies, including electric vehicles.
Companies that bring a new product to the market or enter a new market with an existing product, come across a number of barriers that prevent large-scale diffusion. In order to circumvent or remove these barriers, they can adopt alternative strategies. This paper looks into these barriers and strategies for electric vehicles in BRICS countries.
The paper builds on existing literature describing barriers and strategies for introducing innovative technological products in western markets and in Bottom-of-the-Pyramid markets. The paper starts with a literature review that discusses which barriers and strategies from the existing literature are relevant for the case of electric vehicles and for BRICS countries, and which strategies are the best solutions for particular (combinations of) barriers. Then the empirical part of the research is described, which is based on semi-structured interviews with electric vehicle companies in Brazil (Renault), India (Mahindra Reva) and South Africa (Renault).
The results of the paper indicate that for the case of electric vehicles in BRICS countries the three main barriers are: ‘lack of customers, ‘Institutional barriers’, and ‘inadequate infrastructure’. The two main strategies are found to be ‘lobbying’ and ‘development of infrastructure’. The lobbying strategy is important to get government support in order to accelerate the adoption of electric vehicles. Infrastructure development is important in order to provide the customers with sufficient public charging stations and eliminate range anxiety.
The findings in this research have important implications for managers and academics. For managers, 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 expect in these countries. This research could also serve as a tool in identifying appropriate strategies to be implemented in order to overcome the barriers to large-scale diffusion. For academics, this research opens up the research field into barriers and strategies for market entrance of innovations in BRICS countries. An interesting further research direction is how these barriers and strategies develop over time.