A Cross-Cultural Study of Electric Vehicle Adoption in Multinational Markets: The Case Studies of Australia and China

ABSTRACT

The global automotive industry’s shift towards reducing carbon emissions and embracing electric vehicles (EVs) has made it necessary to study the factors influencing the adoption of EVs in the global market. Although there is an increasing number of studies examining these factors, limited cross-national research exists on the determinants of EV adoption between steady growth markets like Australia and New Zealand and developed markets like the US and China. This study seeks to fill this gap by conducting a detailed cross-cultural comparison between Australia and China and examining the disparities and similarities in EV adoption in the two countries. The study will specifically analyze consumer attitudes towards domestic and foreign brands and delve into the relative importance of product characteristics, country specific factors, and brand image influencing EV adoption. The study will utilize a mixed-method research methodology to provide a more comprehensive understanding of these variables. Data will be collected using online research by examining publicly available information from online forums and websites and analyzed using qualitative (NVivo software) and quantitative (R-software) research methods. Study findings will advance existing knowledge of the country-specific factors influencing consumer behavior in relation to EV adoption, as well as serve as a valuable resource for future studies on the factors influencing EV adoption in multinational markets. This knowledge will also be valuable in the development of marketing strategies and policies that will potentially increase EV uptake in multinational markets.

Background

The current generation is confronted with a significant challenge known as global warming, which is mostly attributed to the excessive release of carbon emissions and the oil crisis (Zang et al., 2022). Prior research has demonstrated that the primary driver of climate change is attributed to emissions originating from the transportation sector (Zang et al., 2021). These emissions have significant environmental implications and drive global warming and its associated challenges (Zang et al., 2021; Singh, 2021). In response to the depletion of oil resources and growing environmental apprehensions, many nations have adopted measures to transition their transportation sectors towards electrification (Wu, Ng et al., 2021). The aforementioned observation aligns with the global automotive industry’s shift towards reducing carbon emissions and embracing Electric Vehicles (EVs) (Jian et al., 2021). Indeed, electric vehicles are gaining prominence in the automotive sector due to their low carbon emissions, energy efficiency, and advanced technology (Nie et al., 2018). The EV market includes plug-in hybrid electric vehicles, battery electric vehicles, and the accompanying infrastructure. Additionally, governments worldwide are endorsing EVs through regulations and incentives. In China, for instance, stringent regulations on privately owned Internal Combustion Engine (ICE) vehicles and incentives for EV adoption have positioned the country as a leader in global EV sales (Nie et al., 2018; Li & Setiowati, 2023). Conversely, Chinese and most worldwide consumers are showing varied attitudes toward EVs over traditional ICE vehicles. Due to the environmental (and economic) challenges linked with gasoline-powered vehicles, studying the adoption of EVs in the global market is relevant and timely.

Research Problem

Although there is an increasing number of studies examining the factors influencing the adoption of electric vehicles, various limitations exist. Various studies stress the role of factors like brand image, perception, awareness, safety, reliability, and battery longevity in EV purchase decisions (Nie et al., 2018; Yang et al.,2022; Zang et al., 2022). Other studies have compared the driving factors behind EV adoption intentions between developed and rapidly growing markets (Higueras-Castillo et al., 2023). Moreover, a number of scholarly investigations have been conducted to explore the influence of psychological factors and public perception on consumer behavior in the EV market (Bjorck & Lu, 2019; Jiang, Wei, et al., 2021; Li & Setiowati, 2023). These studies have primarily focused on understanding how consumers perceive the economic, environmental, risk, and technological benefits associated with EVs. However, limited cross-national research exists on the determinants of EV adoption between steady growth markets like Australia and New Zealand and developed markets like the US and China.

Study Objective

This study seeks to fill this gap by conducting a detailed cross-cultural comparison between Australia and China and examining the disparities and similarities in EV adoption in the two countries. As the largest EV market and also one of the most developed countries in the world (Song et al., 2021), analyzing the Chinese market will increase our knowledge on the consumer behavior, government policies, and other factors influencing the high EV adoption. On the other hand, late-moving countries like Australia will improve our understanding as to why some nations are lagging behind in the EV market and the measures they can take to catch up (Foley et al., 2020). The study will specifically analyze consumer attitudes towards domestic and foreign brands and delve into the relative importance of product characteristics, country specific factors, and brand image influencing EV adoption.

Literature Review

This chapter provides an overview of the existing literature and research about the brand image, the relative importance of EV traits, and the country specific factors influencing EV adoption. It also includes literature on consumer attitudes towards domestic and foreign brands and relevant hypotheses.

Brand Image

The concept of brand image/corporate branding is widely recognized as a crucial marketing component (Keller, 1993; Lin & He, 2015). There is currently no widely acknowledged definition of brand image. Brand image can be defined as how consumers perceive a brand based on the associations they have with the brand (Keller, 1993). Bjorck and Meiru (2019) assert that brand image perceptions encompass both rational and emotional views that consumers associate with a brand. These perceptions play a crucial role in aiding consumers in information processing and distinguishing one brand from another. Li and Setiowati (2023) argue that there exists a positive correlation between consumers’ perception of brand items’ quality and their level of trust in the brand. Therefore, a corporation that possesses a favorable brand image wields a more significant brand influence in comparison to its rivals.

Consumer preferences in the auto start-up industry tend to favor established vehicle companies that have a higher level of popularity (Zang & Qian, 2022). Moreover, the presence of well-established brands that have a lengthy track record of dependability and high performance, together with generally favorable brand perception, instills in users a feeling of assurance and reliance (Zang & Qian, 2022). Although the EV industry is still in its nascent stage it has been observed that a good brand image positively influences consumer loyalty.

H1: brand image has a positive influence on consumer willingness to purchase EVs

Consumer attitudes towards domestic and foreign brands in the EV market

Consumer attitudes towards domestic and foreign brands in the EV market can be understood by analyzing the underlying factors behind consumer ethnocentrism. Consumer ethnocentrism (CE) refers to consumers’ propensity to negatively evaluate foreign products due to the idea that locally produced goods are better than imported brands (Siahaan et al., 2021). Ethnocentric consumers may decide to boycott available foreign brands due to the perception that purchasing imported goods is unpatriotic, immoral, or inappropriate (Bada & Onuoha, 2018). Numerous marketing studies in many countries with diverse ethnic backgrounds have found that consumers with high ethnocentric traits perceive domestic products more positively and have negative attitudes towards foreign products, and are thus more willing to purchase domestic products compared to foreign ones (Siahaan et al., 2021; Wang, Bin Jantan et al., 2022; Yildirim & Ozdemir, 2021). It is, however noteworthy that relationship between consumer attitudes and ethnocentric traits may vary depending on the product’s country of origin, consumers’ valuation on the product’s quality, and product category (Yildirim & Ozdemir, 2021). In marketing, CE feeds on consumers’ notions about the morality and appropriateness of purchasing domestic products over foreign-made products. As such, CE can be used to predict the purchase intent to adopt domestic or foreign products (Wang, Bin Jantan et al., 2022). The following hypothesis has been established based on the above review:

H 2: CE has a negative effect on willingness to buy foreign-made EVs and a positive effect on willingness to buy local-made EVs.

Other factors influencing consumers’ choice of foreign-made products is the effect of the country of origin or the product country image. In addition to brand names, the country where the product is made or assembled also has an impact on consumer’s perception of quality and purchase decisions (Sheng Chung Lo et al., 2017). Saihaan et al., 2021 note that when purchasing products, most consumers choose those that they find comfortable while also taking the country’s specific producer into account. Thus, the country where the product is being produced has a significant influence on consumers’ decision to purchase the product. Research further indicates that product country image has a positive effect on the brand image (Bjorck and Meiru, 2019). Brands associated with countries with a positive image have a high perceived value among consumers, while brands associated with countries with a negative image have a low perceived value (Saihaan et al., 2021). This implies that a consumer’s willingness to purchase a foreign EV brand will increase when the brand is manufactured or assembled in a country with a positive brand image.

H3: Product country image positively influences consumer willingness to buy foreign-made EVs

Relative Importance of EVs

Perceived advantages of EVs

The evaluation of product and service value by consumers plays a significant role in shaping their purchase choices (Zang, Qian et al., 2022). Perceived benefit is a construct that is operationally defined by researchers as the anticipation of favorable consequences after purchase. It is categorized as a cognitive feeling that exerts an influence on consumer behavior and the process of decision-making (Zang, Qian, et al., 2022).

Yang, Li, et al. (2022) conducted a study that examined the factors influencing EV sales from the consumers’ standpoint. Their research findings indicated that the features with the most impact on EV sales were “comfort, manipulation, space, and cost performance.” In their study, Nie, Wang, et al. (2018) found that various factors, including price, maintenance costs, charging time, speed, driving range, and CO2 emission levels, significantly influenced consumers’ decision-making process when choosing between EVs and ICEs. According to Alanazi’s (2023) research, one prominent perceived benefit of EVs that influences consumers’ decision to purchase them is the comparatively lower running expenses. Compared to ICEs, EVs have a cost structure in which procurement costs are high but operational costs are low (Hardman, Shiu, et al., 2016). This is based on the premise that EVs are fuel-efficient because they operate on electricity, and their charging costs are less than petroleum for the same distance traveled (Chu et al., 2019). Indeed, Zang, Qian, et al. (2022) discovered that the lack of petroleum consumption on EVs represents consumers’ contribution to the environment. However, Song, Chu, et al. (2021) discovered that EV consumers care more about cost reductions than environmental conservation. Song, Chu, et al. (2021) found that the advantages of owning an EV include environmental protection, fuel economy, minimal maintenance costs, innovation, and performance. These attributes contribute to the perceived usefulness of EVs.

H4: Perceived value has a positive influence on consumer willingness to purchase EVs

Country-Specific Factors

The global market share of EVs remains low (approximately 1%) despite various initiatives to switch from ICEs to electric cars, with Foley et al. (2020) noting that this figure is relatively lower for some developed nations like Australia. Current research shows that EV subsidies, infrastructure (such as charging stations), renewable energy, education, and income are all country-specific factors influencing EV sales (Li, Yang, et al., 2018).

Consumers are attracted to EVs because of government incentives for EV vehicle ownership, such as tax credits. Government subsidies positively affect the public’s perception of EV characteristics and purchases (Yang, Li, et al., 2022). In China, the government has implemented stringent regulations pertaining to privately owned ICEs and has provided incentives for the acquisition of EV brands (Chen & Zhao, 2013; Nie, Wang, et al., 2018; Yang et al., 2014). These policies initiatives include regulatory incentives (such as toll waivers, access to bus lanes, and free parking) and subsidies (like tax exemption and purchase subsidies) (Li, Yang, et al., 2018). The implementation of these policies has driven China to a leading position in worldwide EV sales, a trend that is projected to continue (Nie, Wang, et al., 2018). As a result, there has been a growing preference among Chinese consumers to choose EVs instead of ICE. However, a study by Foley et al. (2020) on the factors affecting EV uptake in Australia found that Australia lacks the robust policies needed to boost the sales of NEV sales. For example, fuel efficiency standards have not been imposed that will discourage the use of ICEs (Foley et al., 2020), unlike in China (Cheng & Zhao, 2013).

H5: Government policies positively influences intention to purchase EVs

Infrastructure is also a major factor affecting EV uptake. Alanazi (2023) argues that the availability and location of charging stations is more relevance to potential EV consumers than other factors like government policies. China’s position as the global leader in EV sales can be attributed to the availability of adequate charging infrastructure to meet the rising EV uptake (Nie, Wang, et al., 2018). However, Foley et al. (2020) found that this was not the case in Australia, noting that the country lacked sufficient infrastructure to improve EV acceptance.

H6: Infrastructure construction positively influences EV adoption

Theoretical Framework

The following theoretical model is proposed for this study based on the hypotheses generated in the literature review above.

Research Method

A mixed-method research design combining qualitative and quantitative approaches is best suited for this study. This approach will help us get an in-depth understanding of the research questions.

Data Collection

Data will be collected using online research wherein publicly accessible information from online forums and websites will be examined. The research will employ ParseHub, a web scraping tool to gather data (reviews, comments, discussions) from automobile and EV-related websites and online platforms in China and Australia. The study will check for references to perceived benefits, brand image, brand recognition, and intention to purchase.

The criteria for selecting the platforms were based on traffic, how frequent discussions on the research topic were, and the richness of the data. The research has identified the following distinct categories of major online platforms in China and Australia relating to automobiles and EVs.

These platforms have been chosen because they have a wide range of users and potentially contain relevant empirical data on the study variables.

Sample size

The sample size for this study is flexible, i.e., the data collection process will begin with a small subset of forum posts (between 20 and 30). This data will then be assessed for themes, ideas, and insights related to the study’s objectives and research questions. This sample size will then be expanded progressively until data saturation is reached. Data saturation will be achieved once the same responses and ideas start appearing repeatedly and new information or data no longer offers important insights. The aim is to gather sufficient data that will offer an in-depth and valuable analysis and avoid collecting redundant data.

Coding

Thematic analysis will be conducted to code the qualitative data. A codebook with entries for perceived benefits, brand recognition, brand image, and purchase intention will be created, where codes will be assigned to text fragments that fall into these categories. The NVivo qualitative data analysis software will be utilized for this purpose.

After developing a codebook with the entries mentioned above, the data will then be converted to quantitative variables by assigning numerical values to the categories extracted from the qualitative data. The coding system used for this purpose will be the nominal scale and frequency count. In the nominal scale, numerical values will be assigned to represent the different codes, i.e., 1 will be used to represent a positive opinion, 2 for a neutral opinion, and 3 for a negative opinion for each of the study variables (perceived benefits, brand recognition, brand image, and purchase intention). The frequency count will then be applied by simply counting the number of times a code appears, which will help in measuring the code/theme frequencies. A quantitative dataset will then be compiled for all the numerical values assigned to each code, with each row representing a unique data point (e.g., a post or a comment), and each column representing a variable with their corresponding numerical values.

Data Analysis

Content analysis will be used to analyze the qualitative data. The researchers will examine the data for recurring patterns and themes linked to the four study attributes: perceived benefits, brand recognition, brand image, and purchase intention. For the quantitative data, the R statistical software will be used for analysis. This will involve conducting a regression analysis to examine the relationship between the study variables, i.e., perceived benefits, brand image, brand recognition, and purchase intent. The following is the proposed regression model:

Yi = β0 + β1xi1 + β2xi2 + β3yi1+ β4yi2 + ϵ

Where:

• Yi is the predicted consumer willingness to purchase EVs
• β0 represents the intercept
• β1 β2 β3 β4 β5 β6 represent the regression coefficients for the respective independent variables
• β1xi1 represents the brand image
• β2xi2 represents consumer ethnocentrism
• β3xi3 represents product country image
• β4xi4 represents perceived value
• β5xi5 represents infrastructure
• β6xi6 represents government policies, and
• ϵ represents the error term

Significance of Research (Expected Contributions)

This research study will have various significant contributions. First, by filling research gaps in relation to cross-cultural studies on the adoption of EVs, the findings of this study will serve as a valuable resource for future studies on this topic. Findings will also advance existing knowledge of the country-specific factors influencing consumer behavior in relation to EV adoption. Lastly, this research will offer key policy and industry insights. Knowledge of the cross-cultural factors influencing the adoption of EVs in multinational markets can be valuable in the development of marketing strategies and policies.

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