THE E-MOBILITY IN ITALY: STRATEGIC ANALYSIS OF THE ... · abstract During recent years, we have seen how mobility is going through a period of great change; the rising price of oil,

POLITECNICO DI MILANO

School of Industrial and Information Engineering

Master of Energy and Environmental Management

THE E-MOBILITY IN ITALY: STRATEGIC

ANALYSIS OF THE ELECTRIC VEHICLES

MARKET

Supervisor: Professor Davide Chiaroni

Assistant Supervisor: Marco Guiducci

Master’s Thesis prepared by:

Edoardo Barozza 841924

Academic Year 2016/2017

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The present work has been developed as Master’s Thesis in partial

fulfilment of the requirements for the degree of Master of Energy

and Environmental Management at Politecnico di Milano. The

author expresses his availability for further clarification of the

topics here presented.

For questions about this work, please contact the author at the email

address below:

[email protected]

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ABSTRACT

During recent years, we have seen how mobility is going through a period of great change; the rising

price of oil, the more attention to the quality of life due in part to rising levels of harmful emissions

related to the transportation, the growing attitude towards the environmental issue and

technological development are just a few of the many factors that are leading to a new vision of

mobility. Among the new emerging paradigms, the "electric mobility" is definitely one of the most

interesting phenomenon to analyze and study.

Starting from a comprehensive analysis of the major countries involved in this development, it was

highlighted, on the basis of electric vehicles registrations’ data and on the supports and economic

incentives set up by Governments and Public institutions, how the E-mobility paradigm is emerging

in each country and with what degree of development. Furthermore, narrowing more and more the

field of analysis, we moved to a more detailed analysis of the electric vehicle market in Italy. The

purpose of this thesis, in fact, is properly to analyze how E-mobility is evolving on the Italian territory

and to evaluate what could be its future level of implementation.

Therefore, starting from the analysis of the most active countries in the transition towards the electric

mobility, the almost inexistence of a supporting incentives mechanism addressed to the electric

vehicles could be identified as possible causes of the extremely low level of penetration of electric

cars in Italy.

Afterwards, referring to researches and analysis carried out both through a personal investigation

and through the direct involvement of the major actors involved in this process, the two parts of the

Italian electric vehicle market were analyzed: the supply and the demand.

The characteristics and the main aspects related to each side of the market were analyzed pointing

out what might be the barriers and the favorable factors affecting the adoption of the electric

vehicles. These analyses were carried out in order to predict what will be the level of diffusion of the

electric vehicles in Italy by 2020.

Indeed, the last part of the script is dedicated to this purpose and moreover the assessment of the

possible impact generated on the national electricity system and on the level of CO2 emissions has

been performed.

Keywords: E-mobility; Electric vehicles; Italian market; Incentive mechanisms; Strategic analysis.

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ABSTRACT (ITALIANO)

Durante i recenti anni si è visto come la mobilità stia attraversando un periodo di forte cambiamento;

il crescente prezzo del petrolio, la maggiore attenzione alla qualità della vita dovuta in parte ai livelli

crescenti di emissioni nocive legate al trasporto, la propensione crescente verso l’ambiente e lo

sviluppo tecnologico sono solo alcuni dei numerosi fattori che stanno portando ad una nuova visione

della mobilità. Tra i nuovi paradigmi emergenti, la “mobilità elettrica” è sicuramente uno tra i più

interessanti fenomeni da analizzare e studiare.

Partendo da un’analisi globale dei maggiori Paesi coinvolti in questo sviluppo, si è evidenziato, sulla

base dei dati relativi alle immatricolazioni di veicoli elettrici e sulla base dei supporti e delle

incentivazioni economiche disposte dai Governi e dalle istituzioni pubbliche, come il paradigma

dell’E-mobility stia emergendo in ciascun Paese e con quale grado di sviluppo. Successivamente

restringendo sempre più il campo di analisi, si è passati ad un’analisi approfondita del mercato dei

veicoli elettrici in Italia. Lo scopo di questa tesi è infatti proprio quello di analizzare come la mobilità

elettrica si stia evolvendo sul territorio italiano e valutare quale potrebbe essere il futuro livello di

implementazione.

Pertanto, partendo dall’analisi complessiva dei Paesi maggiormente attivi nella transizione verso

l’elettrico, è stato possibile individuare come la quasi inesistenza di un sistema di incentivazione a

supporto dei veicoli elettrici possa essere una delle possibili cause relative al livello estremamente

ridotto della diffusione in Italia delle auto elettriche.

Successivamente, basandosi su ricerche ed analisi svolte sia attraverso un lavoro di ricerca personale,

sia attraverso il diretto coinvolgimento dei maggiori attori coinvolti in questo processo, si è proceduto

ad analizzare le due parti del mercato dei veicoli elettrici: l’offerta e la domanda.

Per ciascuna parte del mercato, sono state analizzate le caratteristiche e gli aspetti principali

mettendo in luce quali potessero essere le barriere e i fattori favorevoli allo sviluppo della mobilità

elettrica. Tali analisi sono state svolte con l’obiettivo di prevedere quale possa essere il livello di

sviluppo dei veicoli elettrici in Italia da qui al 2020.

L’ultima parte dell’elaborato è infatti dedicata a questo proposito ed inoltre è stato valutato il

possibile impatto che tale livello di sviluppo possa avere sul sistema elettrico nazionale e sul livello

delle emissioni di CO2.

Parole chiave: Mobilità elettrica; Veicoli elettrici; Mercato italiano; Meccanismi di incentivazione;

Analisi strategica.

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ACKNOWLEDGMENTS

I would like to acknowledge the help and cooperation of the following:

Professor Davide Chiaroni, for his knowledge and support as thesis supervisor;

Mr. Marco Guiducci, for his guidance and support as the faculty advisor;

The Energy & Strategy Group, for its availability information and support as observatory of the

Politecnico di Milano;

The companies and people interviewed, for their availability and sharing information.

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TABLE OF CONTENTS

ABSTRACT .................................................................................................................................................... i

ABSTRACT (ITALIANO) ................................................................................................................................ii

ACKNOWLEDGMENTS ............................................................................................................................... iii

TABLE OF CONTENTS ................................................................................................................................. iv

LIST OF FIGURES ....................................................................................................................................... vii

LIST OF TABLES ........................................................................................................................................ viii

LIST OF ABBREVIATIONS, ACRONYMS, SYMBOLS AND SIGNS ................................................................. ix

EXECUTIVE SUMMARY ............................................................................................................................... x

1. INTRODUCTION ................................................................................................................................. 1

1.1. Definition of the E-mobility ....................................................................................................... 4

1.2. Methodology and structure of the thesis ................................................................................. 5

2. ANALYSIS OF THE EV MARKET .......................................................................................................... 6

2.1. Description of the Global EV market ......................................................................................... 6

2.2. Description of the European EV market ................................................................................. 10

2.3. Description of the Italian EV market ....................................................................................... 12

2.4. Incentive mechanisms to support the development of the EV ............................................. 14

2.4.1. Characteristics of the incentive policy: ........................................................................... 16

2.4.2. Incentive mechanism in China ......................................................................................... 16

2.4.3. Incentive mechanism in France ....................................................................................... 16

2.4.4. Incentive mechanism in Germany ................................................................................... 17

2.4.5. Incentive mechanism in Italy ........................................................................................... 17

2.4.6. Incentive mechanism in Japan ......................................................................................... 18

2.4.7. Incentive mechanism in the Netherlands ....................................................................... 18

2.4.8. Incentive mechanism in Norway ..................................................................................... 19

2.4.9. Incentive mechanism in Sweden ..................................................................................... 19

2.4.10. Incentive mechanism in the UK ................................................................................... 19

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2.4.11. Incentive mechanism in US .......................................................................................... 19

2.5. Analysis of Total Cost of Ownership ........................................................................................ 20

2.6. Incentive estimation by country .............................................................................................. 22

3. ANALYSIS OF THE ITALIAN EV’S SUPPLY ......................................................................................... 26

3.1. Analysis of the current Italian EV’s supply .............................................................................. 26

3.2. Evaluation of the expected EV’s supply by 2020 .................................................................... 30

3.3. Focus on the increase EV sales and the falling EV batteries cost .......................................... 31

3.4. Evaluation of the strategy adopted by automotive companies ............................................ 34

3.4.1. Positioning of the operators by 2016 .............................................................................. 36

3.4.2. Positioning of the operators by 2020 and analysis of its evolution ............................... 38

4. ANALYSIS OF THE ITALIAN EV’S DEMAND ...................................................................................... 43

4.1. Consumers’ demand ................................................................................................................ 43

4.1.1. Evaluation of consumers’ demand based on the literature ........................................... 44

4.1.2. Evaluation of consumers’ demand based on registrations data .................................... 47

4.1.3. Final considerations about consumers’ demand ............................................................ 51

4.2. Exploration and assessment of the niche markets................................................................. 51

4.3. Analysis of the demand business model ................................................................................. 53

4.3.1. Analysis of business model: Phase 1 ............................................................................... 53

4.3.2. Analysis of business model: Phase 2 ............................................................................... 55

4.3.3. Analysis of business model: Phase 3 ............................................................................... 56

4.3.4. Final considerations and results of the analyses ............................................................ 58

4.4. Alphabet, a virtuous and innovative example ........................................................................ 62

5. CONCLUSIONS ................................................................................................................................. 65

5.1. Summary of the main E-mobility aspects discovered ............................................................ 65

5.2. Possible solutions to boost the E-mobility .............................................................................. 67

5.3. Possible scenario by 2020 ........................................................................................................ 70

5.4. Expected impact on the National electricity system .............................................................. 72

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5.5. Expected impact on CO2 emissions levels............................................................................... 75

REFERENCES: bibliographic sources and sitography ............................................................................. 77

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LIST OF FIGURES

Figure 1. Average value of incentives for each selected country ......................................................... xiii

Figure 2. Expected positioning of each automotive company by 2020 ............................................... xiv

Figure 3. Temporal subdivision of projects ............................................................................................. xv

Figure 4. Expected trend of EVs sales by 2020 .................................................................................... xviii

Figure 5. Where are major manufacturers investing? ............................................................................ 3

Figure 6. Global EVs sales .......................................................................................................................... 7

Figure 7. Detail of EVs sales in 2015-2016 ............................................................................................... 9

Figure 8. Percentages of BEV and PHEV sales in 2015-2016 ................................................................ 10

Figure 9. Evolution of EVs amid 2015-2016 ........................................................................................... 12

Figure 10. Repartition amid BEV/PHEV of Italian annual EVs sales ...................................................... 13

Figure 11. Comparison between TCO of a traditional and an electric vehicle ..................................... 22

Figure 12. Relation amid value of incentives and EV registrations in each selected country ............. 24

Figure 13. Flow of reasoning ................................................................................................................... 29

Figure 14. Comparison between expected trend of EVs offer and battery's price ............................. 32

Figure 15. Classification matrix ............................................................................................................... 35

Figure 16. Positioning of the automotive companies in 2016 .............................................................. 36

Figure 17. Expected positioning of automotive companies by 2020 ................................................... 38

Figure 18. Change of positioning amid 2016-2020 ............................................................................... 39

Figure 19. Projects' temporal division .................................................................................................... 53

Figure 20. Projects considered in the phase 1 ....................................................................................... 54

Figure 21. Projects considered in phase 2 ............................................................................................. 55

Figure 22. Projects considered in the phase 3 ....................................................................................... 56

Figure 23. Major sectors involved .......................................................................................................... 59

Figure 24. AlphaElectric' service description ......................................................................................... 62

Figure 25. Expected EVs sales by 2020 ................................................................................................... 71

Figure 26. Simulation of EVs' electricity demand on a daily charging profile ...................................... 74

Figure 27. Expected emissions in the two different scenarios ............................................................. 76

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LIST OF TABLES

Table 1. Trend of Italian EVs sales in the last five years ........................................................................ 12

Table 2. Framework of incentive mechanisms in the selected countries ............................................ 15

Table 3. Costs related to traditional and electric vehicles .................................................................... 21

Table 4. Characteristics of vehicles considered in the analysis............................................................. 23

Table 5. Evolution of Italian EV market from 2011-2016 ...................................................................... 27

Table 6. Expected evolution of Italian EV market by 2020.................................................................... 30

Table 7. Hypothesis considered for both BEV and PHEV ...................................................................... 73

Table 8. E-mobility scenario's features .................................................................................................. 75

Table 9. Traditional scenario's features ................................................................................................. 75

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LIST OF ABBREVIATIONS, ACRONYMS, SYMBOLS AND SIGNS

% Percent

€ Euro

£ Pound

# Number

AEEGSI Autorità Energia Elettrica Gas e Sistema Idrico

BEV Battery electric vehicle

CO2 Carbon dioxide

CNG Compressed natural gas

CV Horse power

EV Electric vehicle

FCV Fuel cell vehicle

G gram

GHG Green House Gases

Gwh Gigawatt hour

h hour

HEV Hybrid electric vehicle

ICE Internal combustion engine

ICT Information and Communication Technology

IoT Internet of Things

Kg kilogram

Km Kilometre

Kwh Kilowatt hour

LPG Liquefied petroleum gas

PHEV Plug-in hybrid electric vehicle

REEV Extended range electric vehicle

R&D Research and development

TCO Total Cost of Ownership

VAT Value-Added tax

ZTL Limited traffic zone

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EXECUTIVE SUMMARY

Introduction

One of the main changes which are taking place all around the World is strictly related to the mobility.

The mobility concept can be defined as “the movement of individuals or groups from place to place”

and it plays a crucial role in every city representing the lifeblood of our society. Being a critical factor

also for the countries’ economy, the mobility system is going through a period of radical change and

new business models and opportunities are developing in order to innovate and make more efficient

and flexible the entire system.

The electrification of vehicles is one of the aspects that is going to drag the mobility toward a period

of changing in which people will move and satisfy their mobility needs in a new way. This arising trend

can be referred with the term “electric mobility”.

The E-mobility is one of the most debated and key word in the present period and its impending is

going to radically affect not only the main actors involved in the mobility industry (such as automotive

companies), but moreover the “life-style” of the most developed countries which will embrace this

new paradigm. Indeed, despite the electrification of vehicles is a recurring theme in the history of the

automotive industry, in the recent years some changes in the context have paved the way toward a

future characterized by a more sustainable mobility.

The factors involved in this process of changing have various nature and they are coming from

different sectors and stakeholders; for this reason, it is important to enlarge our perspective as much

as possible in order to include in the assessment not only the “core” mobility trends but also the ones

related to the social, cultural and economic sphere. It is also important to evaluate these aspects

through an integrated perspective which enables to consider their mutual and reinforcing effects.

Starting from a macro-perspective, one of the main trend leading the process is surely connected to

the increasing price of the fossil-fuels and the possible scarcity of petrol in the future. These aspects

represents the foundation for the research of new technologies which may overcome those

obstacles; the diffusion of the electric vehicles is going to change the development strategies of the

oil industry which are responding to the gradual decrease in the demand for fossil fuels, nowadays

54% of the oil produced in the World is intended for automotive applications (mobilitàelettrica.it),

looking for new more economic solutions which can satisfy the expected increasing demand of

electricity. The production from renewable energy sources could provide a strong interest in this

sense as it is underlined by the investments done in this field by the major oil companies. A shift

toward a renewable energy will allow to meet the increasing demand for electricity in more cost-

effective way and in a more sustainable way lowering the amount of green-house gases (GHG)

emitted.

The reduction of the carbon intensity is also an important factor that is given a great boost toward

the era of the E-mobility putting the need for a “clean” mobility at the top of the Government’s

priorities. During the recent years, we have witnessed an increase in the level of GHG released in the

atmosphere that have a consequent impact on the air quality and the liveability, especially for what

concerns many metropolitan areas.

The transportation sector is responsible for the 23% of the CO2 emissions and this evidence led

Governments to adopt policies and measures to substantially reduce the emissions from the private

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and commercial vehicles in order to achieve the objective set by the European Union in the 2020

Climate and Energy Package. The development of new policies concerning the environmental issues

is vital in order to guarantee a better quality of life, but this fact as to go with the development of

new technologies. In response to the pressure given by the policy makers, the automotive industry is

facing a great challenge in order to be compliant with the regulatory framework, but also in order to

meet the new consumers’ demand for a more efficient and environmental friendly mobility.

The technological trajectory undertaken by many companies of the automotive sector is

characterized by an innovation research of the propulsion technology for vehicles. These companies

are investing a lot of money in the R&D activities explaining how the E-mobility is increasingly seen

as one of the most promising policy to be implemented. Moreover, not only the automotive

operators, but also other players mainly involved in the ICT sector are entering this market since the

automotive operators are heavily investing in a variety of technology companies in order to meet the

increasing customers’ demand for connectivity.

The ICT companies could represent an important role in this phase, going to meet the deficiencies

managing and supporting the relationship between EVs, charging infrastructure and people.

Finally, another main trend represented by the increase of shared mobility, could have a positive

impact accelerating the diffusion of EVs thanks to the high mileage that will impact on the EVs’

economics.

As it was possible to observe the current state but moreover the future of E-mobility is influenced by

a lot factors which in turn generate impacts and effects among them. In this scenario, it is crucial to

keep an integrated perspective to consider all the possible aspects and then the evolution of the

electric vehicles in each country will depend on the degree of efforts and initiatives that each actor

will carry out.

The E-mobility market

Global market

The Global EV sales in the 2016 were equal to around 773.600 units, whereas in the 2015 the

respective value settled down to 540.000 units. From 2015 to 2016 we have witnessed a growth of

43% in sales and this increasing trend is even higher (145%), if compared to EV sales volume reached

in 2014; this year 315.400 units in total have been sold. At the end of 2016 the number of EVs

exceeded the 2 million units, whose 69% represented PHEV and 31% BEV.

Despite this important achievement, the total number of EVs represent just the 0,86% of the overall

market share even if some evidences show how the E-mobility market sales are growing more than

the overall automotive one (20 times faster).

The World’s largest EV market that is leading the process of electrification of the automotive industry

is represented by China with 351.000 EVs sold in 2016 and a positive growth of 85% compared to

2015. The Chinese EV market faced the largest development amid any other large economies,

increasing over five-fold its market and reaching in 2016 a share in EV sales equal to 1,45%, almost

double than the reference global one. US EV market represents more than a half of the registration

recorded in 2016 registering an increase in the EV sales of 36% respect to 2015 while in Europe

registrations of electric cars in 2016 were around 222.000 units, approximately one third of the

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overall number of new EVs in the World. The only country that has been registered quite a flexion is

Japan, where during 2016 we have seen 20.000 electric cars sold, against the 22.000 units delivered

in the former year. It is worth to notice how the mix between BEV and PHEV is slowly shifting to the

vehicles so called “pure” electric: in 2015 weighed 60% of the overall EV sales, have increased their

dominance to 63% in 2016.

European market

In the last two years nearly 414.500 electric vehicles were registered in Europe. Among them, 1 EV

out of 5 is Norwegian. Indeed, Norway has recently bumped Netherlands for the leadership as the

largest European EV market. During 2016 approximately 45.000 electric cars were sold in the country

representing the 21% of the overall European market sales during 2016 while the Netherlands retain

about 10% of the sales. The UK, France and Germany showed also a good level for what concern the

diffusion of electric vehicles covering respectively the 16%, 15% and 12% of the overall European EV

sales market in 2016.

Italy is still far behind and it weighs only about 1% of the European EV market.

Italian market

In Italy, during 2016, just 2.821 EVs were sold which enable to achieve the 0,16% market share over

the entire Italian automotive market.

The market share of the Italian electric vehicles is nearly one-tenth compared to the market share of

the other European countries: in Germany, the EVs were about 0,7% of the total cars registered, in

the UK the 1% and in France the 1,2%.

Such gap becomes even higher if compared to the Nordic European countries: in Sweden the

registration related EVs have represented 2,4% of the total, while in Netherlands and Norway

respectively 9,7% and 23,3%.

It is evident that the presence of incentive mechanisms in the country could be one of the reasons

which would explain a different trend of EVs’ sales.

It was conducted a comparative analysis among 10 different countries (China, France, Germany, Italy,

Japan, Netherlands, Norway, Sweden, UK and US) respect to which were analysed both purchase

incentives, which provide for the user a reduction on the EV’s purchase price, both use and circulation

incentives, which provide for the user some bonus for the whole lifecycle of the electric car.

Moreover, it was considered an electric vehicle (available both BEV and PHEV model) and it was

calculated the average value of the incentives for each European country at the end of 2016 as

reported in the next figure:

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Figure 1. Average value of incentives for each selected country

Such analysis allowed to understand and associate the value of incentives with the number of EV

registrations for each country highlighting as the first terms could be represent a possible explanation

of the market’s success or failure.

Norway, not by chance, is the leader of EV market also in terms of amount of incentives disbursed

offering extremely generous incentives, about 14.000 € for BEV and nearly 7.000 € for PHEV. A

correlation between the average amount of incentives and its effectiveness it can be observed also

in the Netherlands where the value of the incentives for PHEV is the second highest recorded

immediately after Norway and this evidence could partially explain the huge diffusion of this kind of

vehicle in the country.

Italy posted the lowest amount of incentives (1.500 € for both BEV and PHEV) and so it can reasonably

explain the low and poor diffusion of EV in the Italian automotive market.

Therefore, we carried out a more detailed analysis pointing the focus on the Italian EV market.

Firstly, it was assessed the current EV’s supply focusing on BEV; in the Italian market, there were 20

BEVs model produced by 12 different automotive players in 2016.

Then, the positioning of the automotive companies by 2020 was assessed taking into considerations

the forecasts made by the operators about the release of electric models in the future.

In 2020, 4 new automotive companies (Honda, Opel, Porsche and Audi) will enter the Italian EV

market and EVs’ offer will almost tripled, presenting 54 BEV models.

It is interesting to underline that the expected development of models and segments covered by the

availability of EVs is not the result of a homogenous growth supply by the various operators.

We saw how during the period 2016-2020, the EVs’ offer will bring to a meaningful differentiation

between business models put in place by the industry operators (as it is shown in the figure), while

during the first five years from 2011 to 2016, the business models were in line between each

automotive company.

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Figure 2. Expected positioning of each automotive company by 2020

If it is true on the one hand that the increase of the number of EVs in the future is uncertain, it is also

true that they seem to predominate two different types of orientations, which are strategically

different:

One orientation, which we can call “focusing strategy” and selected by Hyundai, Kia, Mitsubishi, Ford

and Renault, plans to concentrate all efforts in just one segment, in most cases the C-segment, which

is apparently considered the most suitable one, in order to penetrate the market and so the

willingness of the companies in question is to make electric the upcoming new models referred to

this segment. The “focusing strategy” enables to focus all efforts, from the research and development

to the activity of models’ design and concurrent engineering, which in particular involves the battery

manufactures and manufacturers of electric motors, towards a unique objective which is the one to

achieve a greater effectiveness.

If on one hand, in case of success of the selected market segment for the diffusion, the boost given

to the automotive companies that embraced this strategy will enable them to gain an extremely

competitive advantage and it will allow to repay the resources and efforts put in place until now, on

the other hand, in the case in which the selected segment will have a weak reaction, the risk

associated to this strategic decision will have a significant impact on their businesses.

The remaining companies, mainly Mercedes, Citroën, Nissan, Tesla, Peugeot and Audi, are

characterized by a strategy, which we can call “diversification strategy”, related to the diffusion of EVs

not just in one segment but towards a higher number of them. This strategy normally contemplates

the development of a limited number of EVs’ model, one or maximum two, for each of the market

segments covered. The choice of diversification has diametrically opposite advantages and

disadvantages with respect to the focusing strategy. The option to have more segments covered by

the offer generates a limited effects and risks in terms of investments, but it makes the development

phase of electric models, more difficult.

The absence of operators which have embraced with significant decision the E-mobility development

(no automotive operators is expected in the quadrant on the upper right) and the prevalence of

“wait-and-see” attitudes (quadrant on the lower left) or risk diversification choices (quadrant on the

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lower right), can be considered as the result that it is not expected an extremely significant market

growth by 2020, at least in Italy.

Secondly, an analysis of the demand for E-mobility in Italy has been performed considering resources

and studies coming from the literature and evaluating the registrations data about EVs coming from

the Italian market.

Such analysis allowed us to point out some important considerations about how the consumers

perceived the characteristics of the electric vehicles and the main features that characterized their

demand. The results have shown that the most significant barriers affecting consumers’ demand for

EV are the purchase price and the driving range. The purchase price is considered too high by the

majority of the customers and according to their opinions, it does not reflect the real attributes of

the EV, whose performances and in particular the driving range, are considered too weak in order to

attract their interests. Consumers’ demand is oriented to models characterized by relatively low

prices and to electric cars which can satisfy their basic requirements in terms of mobility. Another

important point which affects consumers’ demand is connected to the charging infrastructure. In

particular, the number of charging stations and the possibility to charge the EV at home are valued

as the most important features in this sense and consumers care strongly about these facts when

purchasing an electric car.

The other characteristics and features of vehicles, such as the maximum speed, acceleration, the

number of optional available, the brand and design are estimated as less important by consumers.

Thanks to these results it was possible to discover some niche markets in which those barriers could

be overcome and so the adoption of EVs could be partially favoured. The niche markets selected

were:

- The Public Administration;

- The corporate fleet;

- Car sharing service providers.

All these targets are characterized by a lower resistance to the electric mobility thanks to the lower

impact of EV’s barriers and these benefits are also represented by information coming from the

reality which has seen these markets as the first ones which embraced the E-mobility paradigm.

The evaluation was done, relying the research to a sample of 37 cases of partnership/project which

had seen the adoption of electric vehicles in one of the three niche markets. The cases under the

study are the results of desk-resources, they refer to a time span ranging from 2011 until 2016 and

they were divided in three macro groups (as shown in the next figure) in order to point out the

characteristics of the projects according to their time of implementation.

Figure 3. Temporal subdivision of projects

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It was interesting to notice that projects’ characteristics have seen a huge evolution during this years:

the first projects were related mainly to the only provision of EVs and the number of actors involved

was usually low, one client and one contractor. With the passing years, business models have started

to evolve and comprehend more actors in the projects, cause in this last phase projects were not

related to the simply supply of EVs but within it, the project comprehend a more structured service

which includes also for example the installation and management of the charging stations.

The temporal analysis of the projects allowed to point out the major differences between each phase

underlying how the business models toward the adoption of electric vehicles in private or public firms

have evolved over time. These considerations could allow to evaluate the major sectors of interest

and how the demand toward e-mobility evolved in the past, underlying both the main drivers and

barriers to adoptions.

The first remark that could be done concerns the nature of the client. Out of a total of 37 analysed

projects, it can be stated that approximately 70% of the clients has a private nature while the

remaining part is attributable to Public Administrations. As concerns private client, the private firms

involved in those projects were mainly medium and large-sized enterprises, which can more easily

overcome the obstacle to the adoption represented by the high purchase price. There is so a slow

wave approach to the electric mobility where the trend is driven by large companies, but it was

possible to appreciate how the smaller companies are also approaching and starting them to move

in accordance with this trend. Distinguishing private clients in their respective sectors of belonging

and interest, it was possible to see that the major sector which embraced the adoption of EVs is the

transport sector (32% of projects) while the remaining projects have been developed in various

different sectors, such as the consulting, pharmaceutics and large-scale retail sector.

The common prerogative found behind all these projects is the utilization of the electric cars in the

last mileage and so within the cities borders. This aspect makes far less significant the driving range

of EVs which represents one of the most important barrier to the adoption.

Such analysis was also useful to discover the real goal of companies behind their decisions to electrify

their fleet totally or partially. It was found out that the companies, whose businesses is related to the

logistic (so we are mainly referring to the transport and large-scale retail sector), are less likely to

develop this kind of solution and we could state that they are not driven by reasons about image and

reputation, but the main incentive towards the adoption of electric vehicles is given by the market

itself. Indeed, as a company involved in this kind of activity decides to change in favour of the electric

mobility and starts to operate providing this new service, also its competitors are forced to change

their way of carrying out activities, otherwise they could risk to lose some clients that could decide

to shift their suppliers looking to a more sustainable and green company.

On the other hand, the driver towards the electrification of the fleet of the other private companies,

such as consulting or pharmaceutic companies, is mainly referred to their willingness to stay in line

with their companies’ mission and image. About these companies, usually characterized by a greater

level of innovativeness and curiosity, the aim for which they have developed such kind of projects is

not be addressed to economic reasons, but it is more related to an experimentation of the new

solution in order to understand and test how the E-mobility could work and bring benefits to

businesses. This difference in the kind of approach used by companies can also be seen looking at

the way in which companies react to the main electric vehicle barrier, that is to say the purchase

xvii

price. It is clearly evident that it is difficult for an enterprise to assess the economic return on

electrification investment and it is properly the difficulty to assess such aspect which mainly impact

on the goal of the project of electrification. Companies belonging and familiar to the logistics will be

easier, since the high utilization rate of vehicles for their activities and the possible cost savings due

to the exemption from payment of ZTL and restricted zone charges, ease the perception and

quantification of the return making it more tangible.

Firms, whose aim of the adoption of electric vehicles is mainly attributable to image issue, find it

more difficult to quantify and justify these investments and for this reason these kinds of projects are

linked to an idea of experiment whose adoption is related to a long-term perspective.

The script concludes with the exposition of final considerations and conclusions about the Italian EV

market potential. The previous parts have enabled us to understand the main critical aspects which

characterized the electric mobility in Italy in the last five years. Referring to these results and on the

impressions and information coming from the market, the main actions and mechanisms that local

institutions would have to put in place in order to sustain the development of the E-mobility on the

territory has been provided.

The interventions to be made in the short term and as long as the sector does not reach a proper

technological and commercial maturity can be summarized in the following macro-categories:

Economically facilitate the purchase of electric vehicles

Facilitate the creation of a charging infrastructure

Establish synergies and coordination for the construction of infrastructure

Establish rules and regulations to address the main open points of the industry

As it was possible to see, Italy nowadays presents a low of diffusion of the electric vehicles, compared

to the other countries and such a comparison somehow pointed out the reasons of this huge gap.

The low amount of EVs’ models available and the high barriers perceived by customers are the main

reasons of such a “failure”. However, it was possible to see as both the supply and the demand of

EVs is going to change in the next future.

On the one hand thanks to the strong efforts put in R&D activities to improve the performances of

the vehicles and to the emergence of new partnerships between different actors (automotive

companies, battery manufacturers, utilities…), we will be able to assist at a growth of the EVs offer;

on the other hand, we can also observe how the consumers demand is characterized by an increasing

interest toward the environmental issue and so toward a more sustainable mobility going to

potentially increase the demand side.

It should be also considered the correlation among these two sides; the new investment in R&D and

in the manufacturing processes made by battery manufacturers will enable them to make more

efficient the production processes and to exploit the economies of scale, reducing the unit cost of

the battery. This fact will have a positive effect on the automotive operators which will be able to

offer EVs at a lower purchase price and also to produce new EVs models, due to the increase of

competences and technologies. There will be inevitably a positive effect also on the customers which

will suffer an increasing interest about EVs thanks to the more affordable prices and the wider offer

which will enlarge their possibilities to select the most suited EV for their needs.

xviii

Moreover, the development plans launched by the Government in the recent period for what

concerns the realization of an efficient and capillary charging infrastructure, it is also an aspect which

we should keep in mind since it is going to strongly affect and sustain the future development of the

market. Hence only taking a fully integrate perspective which embraces all this kind of aspects and

actors and considering all the various relationships amid them, we will be able to assess the future of

the E-mobility in Italy.

Starting from this statement and basing on the researches about the market and on the opinions of

the operators gathered through interviews, it was possible to assess that from the beginning of 2017

until the end of 2020 approximately 70.000 EVs will be registered in Italy.

Figure 4. Expected trend of EVs sales by 2020

The EVs will represent the 0,3% of the automotive market share in 2017, registering an increase of

300% if compared to the current situation, and they will represent approximately 2% of the annual

vehicles registrations in 2020.

Soon we will know if our predictions will be right or wrong since 2020 is just three years from now.

In order to ensure that Italy will abandon its position at the bottom of the barrel and reduce the gap

with the main European countries, it is important and crucial that all the parts bring out their duties

participating in an active and consistent way to this transition towards a more sustainable and electric

mobility.

The time to act is now and it is not possible to wait longer if our Country wants to play an important

role and make its contribution towards a greener mobility worldwide.

8.00014.000

25.000

43.000

78.000

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1

1. INTRODUCTION

One of the main changes which are taking place all around the World is strictly related to the mobility.

The mobility concept can be defined as “the movement of individuals or groups from place to place”

and it plays a crucial role in every city. In the last fifty years, the mobility allowed urban centres to

develop, for example, getting the people to use public transport or private vehicles, from their house

to work, visiting friends and relatives, but it also enabled to perform a lot of other activities, such as

the delivery of essential goods.

These evidences highlight the importance that mobility has in our everyday life, representing the

lifeblood of our society. Being a critical factor also for the countries’ economy, the mobility system is

going through a period of radical change and new business models and opportunities are developing

in order to innovate and make more efficient and flexible the entire system.

As reported by a study about the future of mobility, conducted by McKinsey & Company, there a lot

of features that are leading this process of changing; some of them refers to the urbanization and

other macroeconomic trends, others are related to the ancillary mobility services, such as the

connectivity and the Internet of Things (IoT) and further aspects of the core of mobility, including

shared mobility, the autonomous driving and the vehicle electrification.

The electrification of vehicles is properly the aspect that is going to drag the mobility toward a period

of changing in which people will move and satisfy their mobility needs in a new way. This arising

model can be referred with the term “electric mobility”.

The E-mobility is one of the most debated and key word in the present period and its impending is

going to radically affect not only the main actors involved in the mobility industry (such as automotive

companies), but moreover the “life-style” of the most developed countries which will embrace this

new paradigm.

The objective is to understand how it could be the future of the E-mobility and so what becomes

crucial is to evaluate which are the main factors involved in this process and that are affecting the

development of the electric model.

Indeed, despite the electrification of vehicles is a recurring theme in the history of the automotive

industry, in the recent years some changes in the context have paved the way toward a future

characterized by a more sustainable mobility.

These factors have various nature and they are coming from different sectors and actors; for this

reason, it is important to enlarge our perspective as much as possible in order to include in the

assessment not only the “core” mobility trends but also the ones related to the social, cultural and

2

economic sphere. It is also important to evaluate these aspects through an integrated perspective

which enables to consider their mutual and reinforcing effects.

Only in this way we will be sure to assess in the proper way the potential coming from the

implementation of the E-mobility and its future role.

Starting from a macro-perspective, one of the main trend leading the process is surely connected to

the increasing price of the fossil-fuels and the possible scarcity of petrol in the future. These aspects

represent the foundation for the research of new technologies which may overcome those obstacles;

the diffusion of the electric vehicles is going to change the development strategies of the oil industry

which are responding to the gradual decrease in the demand for fossil fuels, 54% of the oil produced

in the World is intended for automotive applications (mobilitàelettrica.it), looking for new more

economic solutions which can satisfy the expected increasing demand of electricity.

In spite of what we may think, the oil “giants” are not opposing to the new course, but they are

working to be participant in this transformation. The production from renewable energy sources

could provide a strong interest in this sense; in the 2016 Eni has announced a strategic plan worth

230 million euro for the construction of large photovoltaic power plants (wired.it) and moreover the

colossus Royal Dutch Shell has completed some relevant strategic acquisitions in the renewable

sector investing in the Dutch wind offshore (lifegate.it).

A shift toward a renewable energy will allow to meet the increasing demand for electricity in more

cost-effective way and in a more sustainable way lowering the amount of green-house gases (GHG)

emitted.

The reduction of the carbon intensity is also an important factor that is given a great boost toward

the era of the E-mobility putting the need for a “clean” mobility at the top of the Government’s

priorities. This great importance for a more environmental sustainability given by Governments can

be justified if we look at level of emissions registered in the last period.

During the recent years, we have witnessed an increase in the level of the amount of greenhouse

gases (GHG) released in the atmosphere that have a consequent impact on the air quality and the

liveability, especially for what concerns many metropolitan areas.

The transportation sector is responsible for the 23% of the CO2 emissions and this evidence led

Governments to adopt policies and measures to substantially reduce the emissions from the private

and commercial vehicles in order to achieve the objective, set by the European Union, to reduce at

least 20% of GHG emissions by 2020, with respect to the level of emission registered in the 1990.

3

The development of new policies concerning the environmental issues is vital in order to guarantee

a better quality of life, but this fact as to go with the development of new technologies.

In response to the pressure given by the policy makers, the automotive industry is facing a great

challenge in order to be compliant with the regulatory framework, but also in order to meet the new

consumers’ demand for a more efficient and environmental friendly mobility.

The technological trajectory undertaken by many companies of the automotive sector is

characterized by an innovation research of the propulsion technology for vehicles. These companies

are investing a lot of money in the R&D activities aiming to develop new alternative forms of

propulsion that can be more efficient, but also less polluting compared to the traditional internal

combustion engine (ICE).

The steps made in this direction by the automotive operators are relevant and explaining how the E-

mobility is increasingly seen as one of the most promising policy to be implemented.

Moreover, not only the automotive operators, but also other players mainly involved in the ICT sector

are entering this market thanks to the advent of the electric mobility as it is possible to see from the

next picture, provided by a study conducted by McKinsey & Company and Bloomberg.

Figure 5. Where are major manufacturers investing?

The picture shows how the automotive companies are heavily investing in a variety of technology

companies in order to meet the increasing customers’ demand for connectivity.

The ICT companies could represent an important role in this transition phase, going to meet the

deficiencies managing and supporting the relationship between EVs, charging infrastructure and

people.

4

Finally, another main trend represented by the increase of shared mobility could have a positive

impact accelerating the diffusion of EVs thanks to the high mileage that will impact on the EVs’

economics. An analysis performed by McKinsey reveals as for every 10% increase in shared mobility,

the cumulative number of EVs sold could increase by up to 5%.

As it was possible to observe the current state but moreover the future of E-mobility is influenced by

a lot factors which in turn generate impacts and effects among them. In this scenario, it is crucial to

keep an integrated perspective to consider all the possible aspects and then the evolution of the

electric vehicles in each country will depend on the degree of efforts and initiatives that each actor

will carry out.

In the next section, the description of the new electric technology is given together with the types of

EVs considered in the following analysis. Subsequently, a brief paragraph is dedicated to the

explanation of the methodology used during the execution of the thesis.

1.1. Definition of the E-mobility

The E-mobility, in the present thesis, but also in one of its many meanings, refers to all vehicles that

use the electricity as primary source of energy, with the possibility to charge the battery of the vehicle

by plugging to wall outlet.

Given this definition, it is possible to include in the E-mobility world essentially two different types of

vehicles which differ for their propulsion scheme:

Battery Electric Vehicle (BEV): this typology, also called pure electric vehicle, is characterized by

a propulsion system composed by an electric motor powered by batteries that store the

electric energy. The principal components of this type of vehicle are the batteries, which

enable the storage and transfer of the electricity, an electric motor, which provides the

motion to the vehicle, and a controller, which is able to control the amount of power, to be

supplied to the engine, based on the use of the driver of an accelerator pedal and therefore

determines the speed. Usually this type of vehicle enjoys the so-called “regenerative braking”,

that permits to recover a part of the kinetic energy of the vehicle during the braking process.

Plug-In Hybrid Electric Vehicle (PHEV): this type of vehicle is characterized by the presence of

two sources of energy that work together. The first source of energy is an electric motor, that

represents the primary source of propulsion and works exactly in the same way as the one

installed on a BEV; the second refers to an internal combustion engine (ICE) conventionally

5

fuelled by gasoline or diesel. This ICE can be used in order to charge the battery or when

autonomy of the battery is not enough to cover long distances.

It is possible to introduce also a third category of vehicles, the Extended Range Electric Vehicle (REEV

or E-REV). The scheme of this vehicle is comparable with PHEV one, but with the distinction that in

this case the ICE is smaller, because it plays a completely different role; in fact, this compact gasoline-

powered generator has the only purpose to supply electricity to the battery, which in turn fuelled the

electric motor. Also for this type of vehicle, the plug-in system represents the main charging mode of

the battery and so it can be considered as a sub-group of the PHEV.

Hence, for what concerns EVs, they refer to vehicles that use an electric propulsion system as primary

source of energy and they are characterized by the possibility to plug-in to the electric outlet in order

to charge the battery, independently if they are equipped with an ICE.

The reason why the conventional Hybrid Electric Vehicle (HEV) is not being taken into account in the

analysis is that the primary energy source comes from an ICE and moreover this typology has not the

possibility to charge the batteries by plugging the vehicle to the electric outlet.

1.2. Methodology and structure of the thesis

The present thesis was developed and structured in the following way. First, an analysis of the EVs

market was performed starting from a Global level and then reducing the focus till the Italian market,

which represented the objective to assess. This type of analysis enabled to point out the main

features behind the E-mobility in each selected country and it allowed to discover the level of

implementation in each market.

After the identification of the characteristics of the Italian EV market, the analysis is split in two parts:

the first part focuses on the EVs’ supply and the second one point out the characteristics of the

demand side.

Both the analyses are based on desk researches and on direct researches on the market through the

use of interviews with the major stakeholders active in the market.

The aim is to estimate correctly the current state of the Italian EV market and moreover try to forecast

which could be the level of implementation of the E-mobility paradigm in Italy in 2020.

About that, the final part of the script is dedicated to the main results of the analysis which are then

used to make final considerations and assessments.

Finally, the expected situation by 2020 is provided.

6

2. ANALYSIS OF THE EV MARKET

This section of the thesis aims to provide a general picture of the E-mobility analysing the actual state

of the Global, European and Italian electric vehicle market, looking in particular at the increasing

trend faced in the last three years and at the geographical distribution of the registrations. Starting

from this analysis, it will be presented a description of the main incentive mechanisms used for the

diffusion and development of the EVs in the most advanced and developed countries and a

comparison with the Italian incentive mechanism will be performed. This part ends with some

considerations regarding the relationship between the incentive characteristics, both type and

amount, and the EV level of diffusion.

2.1. Description of the Global EV market

The Global EV sales in the 2016 were equal to around 773.600 units whereas the 2015 the respective

value settled down to 540.000 units. From 2015 to 2016 we have witnessed a growth of 43% in sales

and this increasing trend is even higher (145%), if compared to EV sales volume reached in 2014; this

year 315.400 units in total have been sold.

During 2016 the sales of the EVs registered a growth in each quarter, passing from around 130.500

units in the Q1 to the 255.600 units sold in the Q4. The month of December was characterized by the

highest monthly sales volume that has ever been reached, with 102.500 units.

Although the highest monthly record of EVs sold has been achieved during the Q4 of the 2016, the

growth rates in this quarter was lower if we compared the amount of EVs sold in the Q4 respectively

in 2015 and 2016. It is worth to notice that this evidence is strongly related and influenced by the

events that were running in that period, such as the great diffusion of PHEV in Netherlands, and as

the lower growth registered in the Chinese market during the 2016 – Q4, that was affected by more

strict requirements applied by the local Government in order to obtain subsidies.

At the end of 2016 the number of EVs exceeded the 2 million units, whose 69% represented PHEV

and 31% BEV.

Despite this important achievement, the total number of EVs represent just the 0,86% of the overall

market share even if some evidences show how the E-mobility market sales are growing more than

the overall automotive one (20 times faster).

7

Figure 6. Global EVs sales

Maintaining a Global market perspective, it is possible to highlight which are the world’s largest EV

markets that are leading the process of electrification of the automotive industry.

The first position is held by China, which represents the world’s largest market, with 351.000 EVs sold

in 2016 and a positive growth of 85% compared to 2015. This raise was more or less constant for all

2016 during which we have assisted at a doubling of the volumes of 2015, in the first half of year.

The remaining half of the year was characterized by a weakening growth if compared to the same

period of 2015, which was due to the above mentioned reduction of the local subsidies. The Chinese

EV market faced the largest development amid any other large economies, increasing over five-fold

its market and reaching in 2016 a share in EV sales equal to 1,45%, almost double than the reference

global one.

Thanks to these important results, China has removed the US leadership’s largest EV market in 2015,

with more than 200.000 EVs sold.

Hence US became the second world’s largest market and together with China, they represented more

than a half of the registration recorded in the last year.

In 2016 we have assisted to an increase in the EV sales of 36% respect to 2015, with 157.130 units

sold. During the sole month of December, 24.500 EVs were delivered corresponding to 1,46% of the

markets. There has been a growth year by year in the EVs sales, with the only exception of 2015

during which the amount of EVs delivered was 4% lower than the same value recorded in 2014. In

particular, from May to September 2014, the flexion was even higher, because the customers were

waiting for new models with better range (like Tesla Model X) that were released in September of

the same year. As was expected, the 2015-Q4 registered a EVs sales 5% higher than 2014, but this

raise was not sufficient to take off the reduction occurred during the previous months.

0

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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8

Nowadays US, thanks to its favourable local conditions (low interest rate, high consumer confidence),

is one of the most flourishing EV market and future seems to be optimistic; during the very first

months of 2017 a 70% increase in sales has been registered with respect to January 2016.

Also the data coming from Europe seems to be rather encouraging for what concern the diffusion of

the EVs. The registrations of electric cars in 2016 were around 222.000 units, approximately one third

of the overall number of new EVs in the world.

The European market suffered a growth during the period from 2013 to 2016, with an average

increase year by year of about 54%. In particular, amid 2014 – 2015, we saw an increase of nearly

100% in the electric vehicle registrations, mainly due to the better tax benefits and incentive

mechanisms available in some European countries, in particular in the Nordic ones.

Despite the growth in 2016 with respect to the previous year was lower (13%), the beginning of 2017

seems promising. The preliminary results concerning January 2017 state a 54% growth of the sales

compared to January 2016 and this could pave the path for a new year characterized by an average

increase of 26% and about 60.000 electric cars delivered, according to the current projections.

In a global perspective, the only country that has been registered quite a flexion is Japan, where

during 2016 we have seen 20.000 electric cars sold, against the 22.000 units delivered in the former

year, hence registering a drop of 9% in sales. The major causes of this fall may be related to the

structure of the Japanese market, which is mainly composed by two types of EVs models (Mitsubishi

Outlander PHEV and Nissan Leaf) and so there is not a wide offer of models that could boost the

market. Furthermore, Toyota, the largest automotive company in Japan, has opened its doors to

electric vehicles only recently (Fortune, 2016), whereas in the past it concentrated its forces and it

invested heavily in the R&D of an alternative propulsion system creating the hydrogen fuel-cell

vehicles (FCVs).

Aggregating the remaining market under the name of “Rest of the World”, this piece accounts for a

tiny part of the worldwide market but it anyway undergoes the rising trend that characterized EV

market in general and it registered a growth of 11%, going from 20.000 electric cars sold in 2015 to

22.000 units sold in 2016.

9

Figure 7. Detail of EVs sales in 2015-2016

With an eye to the previous information, it is possible to state that the Chinese market stands for

45% of all EVs sold globally in 2016, increasing its share of nearly 30% in respect to 2015 when it

“weighed” approximately 35% worldwide. China subtracted weight especially to the European

market, down from 36% in 2015 to 29% in 2016, and in lower part to the US market, which shifted

from 24% in 2015 to 21% in 2016.

The main drivers of the huge development of China are to be found in its Government which put, in

last years, strong efforts in order to reduce the amount of GHG emissions and hence promoting,

through the creation of local subsidies and measures, the development of the Chinese electric

vehicles market.

It is worth to notice and it looks also evident, how the mix between BEV and PHEV is slowly shifting to

the vehicles so called “pure” electric.

At a global level BEVs, that in 2015 weighed 60% of the overall EV sales, have increased their

dominance to 63% in 2016.

Taking the total amount of electric vehicle sold per each year and looking at its repartition between

BEV and PHEV, it is possible to address this progressive shift to BEV to the different geographical

composition.

Starting for example from US countries and considering 2013, gains for PHEVs were a little bit higher

than BEVs’ ones, and the PHEVs represented the 51% of the total EVs sold in the US market. Year by

year this percentage changed at the expense of PHEVs, that have seen a reduction of their magnitude

of 13% until 2015. During 2016 we have seen a comeback of the PHEVs changing again the

percentages that however remain in favour of BEVs (54%).

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2015 2016

10

This unforeseen trend could be attributable on one hand, to a stronger level of import of PHEVs put

in place by US whereas, on the other hand, it is due to the lower interest that buyers start to have

towards the almost popular BEVs models, such as Nissan Leaf. Anyway, this trend seems to be

temporary and the diffusion of new more affordable BEV models will enhance the leadership of this

type of solution.

The shift in sales to the “pure” electric vehicle can be seen also in the Chinese market where, thanks

to the big amount of subsidies given to the pure electric solution, the BEVs represent about 70% of

the overall EVs sales, while in the European market the mix between BEVs and PHEVs is half and half

even if in the following years it is expected a major incident of BEVs also in this market, as the

preliminary data of 2017 show. This trend is also underlined by the operators themselves who are

focusing strongly on BEVs and they look at PHEVs, which were in fact the first step next to the hybrid

generation, as obsolete solutions. Moreover, nowadays the BEVs, thanks to the strong resources and

investments which made possible their performance boost, are able to compete without any

problems against PHEV in the market. Indeed, BEV is the solution which dominates the industrial plan

of the operators who decided to focus on the electric mobility for the next future.

2.2. Description of the European EV market

In the last two years nearly 414.500 electric vehicles were registered in Europe. Among them, 1 EV

out of 5 is Norwegian. Indeed, Norway has recently bumped Netherlands for the leadership as the

largest European EV market. During 2016 approximately 45.000 electric cars were sold in the country

registering a growth of 33% over the previous year. The Norwegian market represented the 21% of

63%

37%

Sales 2016

BEV PHEV

60%

40%

Sales 2015

BEV PHEV

Figure 8. Percentages of BEV and PHEV sales in 2015-2016

11

the overall European market during 2016 and the majority of the EV sales refers to BEV which

accounts nearly the 70%.

Netherlands has held the top position as leader of the European EV market since 2015, when in the

country were approximately registered 44.000 units, 183% over 2014. Only in December 2015,

15.900 electric cars were sold, over 7 times higher than the average monthly rate, which allowed the

country to be the third EV market worldwide. The striking increase was influenced by the new vehicle

taxation scheme that was applied in the country since 1st January 2016, which raised the expenses

for the cars with high emissions and so led the consumers to get new cars, among which also EVs,

before 2016.

The advance in the vehicle purchase in 2015 brought to an unavoidable drop in 2016, 48% sales

reduction, and as a consequence the country lost its leadership as the largest European EV market.

Nowadays, the Netherlands retain about 10% of the sales in the European market and among this

percentage the 90% is represented by PHEVs according to the particular taxation scheme applied in

the country.

Amid Norway and Netherlands, we can rank other European countries, such as the UK, France and

Germany, that showed a good level for what concern the diffusion of electric vehicles, covering

respectively the 16%, 15% and 12% of the overall European EV sales market in 2016.

The UK faced amid 2015 – 2016 a growth of 36% in EV sales, passing from 27.000 electric cars sold in

2015 to 37.000 units delivered in 2016.

In France and Germany, the growth was less pronounced, respectively 28% and 6%, and the scene

was characterized by a predominance of the PHEV in the case of Germany while in France the major

part of the sales was covered by BEVs.

Italy is still far behind and it weighs only about 1% of the European EV market. In the next part, it will

be provided a more detailed analysis of the Italian EV market.

In the following chart, in order to give a comprehensive vision of the segmentation of the European

EV market, it is reported the detail of the European EV market for the year 2015-2016 and the

respective changes.

12

2.3. Description of the Italian EV market

The first models of electric cars appeared on the scene in 2010, but the penetration at that time was

too low and just 40 electric cars were registered. In order to see a substantial increase in the EV sales,

we need to wait till 2012, during which 652 units were comprehensively registered, representing

0,05% of the market share.

From that time, the EVs have experienced a huge growth year by year, especially from 2012 up to

2015, period in which we have assisted to an average monthly increase equal to approximately 54%.

The detail of the EV sales in the Italian market for the 5 last years is reported in the table below.

Table 1. Trend of Italian EVs sales in the last five years

2012 2013 2014 2015 2016 TOTAL

BEV 507 836 1.075 1.451 1.376 5.245

PHEV 145 218 446 891 1.445 3.145

Total EV sales 652 1.054 1.521 2.342 2.821 8.390

% EV over total sales 0,05% 0,08% 0,11% 0,15% 0,16% 0,10%

In Italy, during 2016, just 2.821 EVs were sold which enabled to achieve the 0,16% market share over

the entire Italian automotive market.

Figure 9. Evolution of EVs amid 2015-2016

13

What is interesting to observe is also the distribution of the EV sales between BEV and PHEV and its

evolution year by year.

In 2012 the division was nearly 1 PHEV for each 5 BEV sold in the market. Going ahead, the PHEVs

were raising their presence in the market shortening the distance to BEVs thanks to the optimum

results experienced by the hybrid vehicles.

The total amount of electric cars sold in 2015 were equal to 2.342 units, among which 1.451 BEV and

891 PHEV. From 2015 to 2016 there was an increase in sales approximately 20% and for the first time

the PHEV surpassed the BEV, achieving 51% percentage of sales.

Figure 10. Repartition amid BEV/PHEV of Italian annual EVs sales

Despite the rising increase in sales, +332% from 2012 to 2016, and a total EV sold equal to 8.390, the

Italian EV market remained small and characterized by very limited dimensions if compared to the

Global ones.

The market share of the Italian electric vehicles is nearly one-tenth compared to the market share of

the other European countries: in Germany the EVs were about 0,7% of the total cars registered, in

the UK the 1% and in France the 1,2%.

Such gap becomes even higher if compared to the Nordic European countries: in Sweden the

registrations related EVs have represented 2,4% of the total, while in Netherlands and Norway

respectively 9,7% and 23,3%.

Italy differs from the rest of the countries also for what concerns the rate amid BEV and PHEV; as it

was previously discussed, the BEV component is slightly decreased in the last years (1.376 units

delivered in 2016 against 1.451 in 2015), but it increased the number of PHEV’s registrations (891

507836

10751451 1376

145

218

446

891

1445

0

500

1000

1500

2000

2500

3000

2012 2013 2014 2015 2016

EVs

sold

BEV PHEV

14

units in 2015 and 1.445 units in 2016). This trend doesn’t follow the same direction of the overall

European EV market, in which we have observed a progressive shift in favour of BEV.

However, if we take a general perspective and we consider the whole period amid 2012 – 2016, it is

possible to notice that the whole 8.390 units sold are represented by BEV (63%) and PHEV (37%).

The BEV’s percentage is not so lower than the one observable in the principal European EV markets;

in Norway BEVs represent the 78% of the total EV sales and in France 76%.

Again, such phenomenon is higher than the European average, which is due, at least in part, to the

particular mix of Netherlands.

2.4. Incentive mechanisms to support the development of the EV

In this section, in order to assess the main incentive mechanisms dedicated to the development of

the electric vehicles, it was conducted a comparative analysis among 10 different countries, with

higher than average EV market share: China, France, Germany, Italy, Japan, Netherlands, Norway,

Sweden, UK and US. (Italy does not represent a country with an EV market share higher than the

average, but it has been clearly taken into account).

Among the incentive mechanism, two macro-categories of incentive dedicated to the electric cars

have been identified:

EV purchase incentives, which provide for the user a reduction on the EV’s purchase price;

EV use and circulation incentives, which provide for the user some bonus for the whole

lifecycle of the electric car;

Furthermore, amid EV purchase incentives, it is possible to take into account:

- Rebates at purchase: in this case who is going to buy an EV enjoys a discount at the moment

of purchasing and he will pay a lower price than the one reported in the list;

- VAT exemptions: at the moment of the EV’s purchasing the VAT is not applied;

- Tax deductions: in this case the user can deduct part of the expense incurred to acquire the

EV and he will enjoy a tax refund in the next years;

For what concerns the EV use and circulation incentives, the following types of incentives may be

included in this category:

- Circulation tax exemption: the EV’s user enjoys a discount on the circulation tax that can be

partial or total;

15

- Deduction on tariffs: in this case the user enjoys a discount, partial or total, on the price for

the highway toll, on the price of parking charges, etc...;

- Electricity cost reductions: the user enjoys a reduction of the price of the electricity used in

order to charge the vehicle;

The types of incentives, that have just been discussed, were also assessed taking into account their

nature, distinguishing between nationwide incentives and regional incentives. This distinction

allowed the evaluation of the impact that each type of incentive has on the population and in the

table 2 it is highlighted in different colors:

Green: the incentive policy is prepared by the central Government and so it has an impact on

the whole national population;

Orange: the incentive policy is stated by a local Public Administration (region or municipality)

and it has an impact on at least the 50% of the national population;

Red: the incentive policy is stated by a local Public Administration (region or municipality) and

it has an impact on less than 50% of the national population.

After this brief introduction and description of the methodology of the analysis, in the table below it

is reported the framework of the EV incentive policies currently presented in the selected countries.

Table 2. Framework of incentive mechanisms in the selected countries

16

At first sight, the table shows that if the incentive policies, whose characteristics have been

established by the central Governments, are referred more to purchase incentives, instead, among

the use and circulation incentives, it is prevailing a regional or municipal nature. This characteristic

seems to be quite obvious since the latter type of incentive policy is related to the road network

whose control is usually adopted at local level.

In the following part, a brief discussion about the types of EV incentive policies will be performed for

each selected country. The analysis will allow to better understand the policy adopted in each country

and it will enable us to discover and understand the reasons behind each country’s failure or success.

2.4.1. Characteristics of the incentive policy:

2.4.2. Incentive mechanism in China

In China the EVs enjoy an exemption from the purchase tax, which is usually based on the engine size

and on the purchase price. The amount of the incentive provided is amid 4.500 and 8.000 € and the

highest band of incentive is ordinarily applied to BEVs, while the lowest level is mostly applied to

PHEVs. The Chinese EV market can also rely on use and circulation incentive, in particular the electric

cars are exempt from the circulation tax.

2.4.3. Incentive mechanism in France

In France it is in force a bonus-malus system which grants a premium to the user who is buying an

electric or hybrid vehicle; the amount of the premium depends upon the level of CO2 emissions

emitted by the vehicle and in particular:

1. For a vehicle whose emissions are including amid 61 and 110 g CO2/km, the bonus is equal to 750

€;

2. For a vehicle that emits between 21 and 60 g CO2/km (generally PHEVs), the bonus is equal to

1.000 €;

3. For a vehicle that emits 20 g CO2/km or a lower amount (in this case we refer mainly to BEVs), the

bonus granted is 6.300 €.

Moreover, in the country at regional level, there is possibility for the user to be exempted from the

payment of the registration fee. Such option is at the discretion of regions and the exemption could

be total or about 50% for all the alternative fuel vehicles (electric, hybrid, LPG, CNG).

17

2.4.4. Incentive mechanism in Germany

Germany is strongly involved in the development of the E-mobility and recently (July 2015) it

launched a program that earmarks 1,2 billion €, aiming with to stimulate the purchase of at least

30.000 EVs by 2019.

In addition, from July 2016, the buyers of pure electric cars, gain an incentive equal to 4.000 €, while

the amount of incentive decreases to 3.000 € in the case of PHEV. Only EVs characterized by a price

list lower than 60.000 € can be subsidized with the reward and the promotion is valid for a maximum

of 400.000 EVs. On German territory there are also use and circulation incentives, in terms of

exemption from the annual circulation tax, BEV and PHEV are exempt for a period of 10 years starting

from the year of their first registration, and in terms of deduction on tariffs, EVs benefit from free

parking and reserved parking spots.

2.4.5. Incentive mechanism in Italy

As a form of market incentive, in Italy in 2014, it was issued a law, acted in August 7, 2014 n.134,

which provided an economic incentive both for the purchase of EVs and for the development of

charging infrastructure networks. However, during the parliamentary approval, the text of such law

was changed and the economic support was extended to the whole family of environmentally friendly

vehicles (electric, Hybrid, LPG, CNG). This has led to a parity of allocated resources regardless to the

fact that the vehicles belonged to mature technologies with already established market rather than

to the emerging technologies of electric vehicles, which have objectively more support needs in their

market launching phase. Hence this fact led to a decrease of the effectiveness of the measure as

concerns the E-mobility and it can also partially explain why the number of electric vehicles in Italy is

lower than in the other European countries.

Anyhow the contributions were suspended since of 1st January 2015 and nowadays in Italy there are

not EV purchase incentives.

EVs enjoy the exemption of the circulation tax for a period equal to 5 years from the date of the first

registration and after this timeframe, they benefit from a reduction about 75% of the rate applied to

the equivalent petrol vehicles. In some regions (such as Lombardy and Piedmont) the exemption is

extended to the entire life of the vehicle.

Moving through the field of circulation incentives, it is possible to observe in many of the major Italian

municipalities, the presence of local incentive; in Milan, the access in areas with limited traffic is

granted to all EVs. They are not expected to pay the parking in the paying areas and EVs can park in

18

areas reserved for residents. Also in Rome and Turin, the access to some historical areas with limited

traffic is allowed to the electric cars.

Finally, a sort of “indirect” incentive for the E-mobility is delivered by the European Union through

the Community Directive 2009/33/CE, which is addressed to the promotion of the environmentally

friendly vehicles, offering opportunities for the EVs.

In Italy this directive was implemented by the Legislative Decree of 3rd March 2011 n.24, which

requires Public Administration and operators for the discharge of public service obligations, to

include in their procurement tenders and in the vehicles’ operational costs evaluation, also the cost

of externalities deriving from the polluting emissions of vehicles, expressing the weight of such

factors in economic terms. Hence although the EVs are not specifically mentioned, their utilization,

thanks to the absence of emissions, can be favoured.

2.4.6. Incentive mechanism in Japan

In the Japanese country incentives are based on the price difference between the price of EV and the

price of an equivalent gasoline car and maximum cap is fixed at 7.500 €. The average incentive is

estimated to be equal to 5.000 € for BEV and to 3.000 € for PHEV.

There is also a reduction of the price of the electricity for EVs’ users and at more local level the EVs

are exempted from the annual tonnage tax and enjoy from a reduction of the automobile tax.

2.4.7. Incentive mechanism in the Netherlands

In Netherlands since 2016, the cars with zero CO2 emissions are exempted from the payment of the

registration tax. For the other cars there is a differential charging system: there are five levels of CO2

emissions and the taxation is progressively growing with increasing amount of emissions of CO2/km.

PHEV settle at the first level, amount of emissions lower than 80 g of CO2/km, and they pay 6 € g

CO2/km, while the diesel cars which emit more than 80 g CO2/km have to pay 86 € per each g of

CO2/km. This incentive structure offers significant advantages both for BEV and PHEV with respect to

the tradition ICE cars.

In the country, the BEVs are also exempted from the circulation tax. In 2015 this exemption was

extended to PHEVs emitting an amount of CO2 emissions lower than 50 g CO2/km, while since 2016

it is applied 50% of the circulation tax payed by a traditional car for such vehicles. Finally, the

Netherlands’ Government exempts from paying of road taxes the vehicle with zero CO2 emissions

and it applied a reduction about 50% of road tax paid by traditional vehicles to the PHEV, with

emissions lower than 50 g CO2/km.

19

2.4.8. Incentive mechanism in Norway

Norway as the leader of the European EV market is characterized by a strong incentive scheme. First

of all, BEVs are exempted from the purchase tax and a reduction of the tax (up to nearly 11.000 €) is

applied to PHEVs. No VAT tax (set equal to 25% of the price car before tax) is applied to BEV while

the same exemption is not enforced to PHEV. The country is also characterized by numerous indirect

incentives such as the urban and highway toll exemption, free parking and exemption from the

payment of the ferry tickets. Finally, it is also provided in some cities the funding for normal charging

stations concerning for example parking garages, shopping centres and shared apartment buildings.

2.4.9. Incentive mechanism in Sweden

Since 2011, in Sweden it is granted a refund for who is going to buy a “green” car. The amount of

such premium is equal to 20.000 Swedish krones (SEK), approximately 2.000 €, for PHEVs emitting

less than 50 g CO2/km, and it is set at 40.000 SEK (4.000 €) for BEVs.

Furthermore, EVs, both BEV and PHEV with electric energy consumption per 100 km lower than 37

kWh, are exempted from annual circulation tax for a period of five years from the date of the

registration.

2.4.10. Incentive mechanism in the UK

In the United Kingdom, the incentive system provides a purchase incentive for EVs: BEVs receive a

grant of 4.500£ (nearly 5.000 €) and PHEVs whose emissions have to stay below the threshold 75 g

CO2/km and the price has to be lower than the cap imposed equal to 60.000£, are refunded with a

grant of 2.500£ (2.800 €).

The exemption from the annual circulation tax is based on the level of CO2/km and in order to obtain

such benefit the level of emissions of EVs has to be lower than the threshold sets equal to 100 g

CO2/km. Use and circulation incentives by their nature are settled at a more local level and they could

refer to free parking. An example of incentive policy decided at local level takes place in London,

where electric cars are exempted from congestion zone charges.

2.4.11. Incentive mechanism in US

In the US, EVs benefit from a fiscal detraction at national level. The detraction is different from BEV

(7.500 €) to PHEV to whom it is amid 2.500 and 4.000 €. Some States offer additional incentives:

California, for instance, offers a discount up to 2.500 € at the purchasing time, Connecticut up to

3.000 € and Colorado up to 6.000 €. It is estimated that the average value of the incentive offered by

each single State for the purchase of an electric car is equal to 1.000 €, both for BEVs and PHEVs.

20

In addition, in some States there are exemptions in force for the registration tax and other measures

aiming to the reduction of the electricity cost for EVs’ users.

Among all the selected countries the typology of incentive policies adopted is quite varied and it is

possible to observe that in each country both purchase incentives and use and circulation incentives

have been adopted, except in Italy.

The comparative analysis seems to bring out as key component for the diffusion of the electric

vehicles the coexistence of both two types of incentives identified; the purchase incentives are

managed at national level while the use and circulation incentives are decided at a more local,

regional or municipal, level.

As it was expected, countries like Norway and Netherlands, which are characterized by a quite

significant EV market share, are also well organized in terms of support given to their customers

through both types of incentive. On the other hand, in countries like Italy, where there are not

purchase incentives and the development of EV market is supported by just local initiatives, the level

of EVs’ diffusion is extremely reduced.

Moreover, the importance and the need of both national and local incentives in order to exploit the

maximum potential of development, it can be underlined even if we consider the Total Cost of

Ownership (TCO). In fact, it is necessary to look at the purchase of the EV from this perspective and

so taking into account the whole life of the vehicle not just the initial investment.

About that in the following paragraph, the comparison between the TCO of an electric vehicle model

and the traditional vehicle’s is performed.

2.5. Analysis of Total Cost of Ownership

This analysis allows to understand the difference in economic terms between an electric vehicle and

a traditional one taking into account the whole life of vehicles.

It will provide not only a fair comparison amid the two solutions, but also the existing gap in monetary

terms suggesting us which could be the amount of incentive needed in order to make more attractive

and competitive the electric car, with respect to the traditional solution.

In order to assess the Total Cost of Ownership, it was considered a traditional mid-size vehicle and its

electrical equivalent, more precisely the comparison was developed amid Renault Clio and Renault

Zoe. For what concerns Renault Clio, it was considered a fuel consumption about 4,6 l/100km and a

21

maintenance cost approximately equal to 4 c€/km while for Zoe, the consumption was set equal to

146 Wh/km and the maintenance cost 2 c€/km.

Moreover, in the computation of the TCO for the EV, no form of incentive was considered and it was

esteemed for both models an annual average mileage of 15.000 km and an RCA policy and circulation

tax respectively equal to 900 € and 170 € computed taking into account their respective annual

average values in Italy.

In the table below, only those cost items which differ from the electric and the traditional model are

shown. Under this assumption the TCO can be expressed as a function of the initial investment, the

fuel cost and the maintenance cost.

Table 3. Costs related to traditional and electric vehicles

Renault Clio Renault Zoe

List price [€] 15.350 33.000*

Fuel cost [€/year] 1.056 353

Maintenance cost [€/year] 595 298

*The price is comprehensive of the battery cost

The electric car experiences a higher initial investment (nearly twice) if compared to a traditional one,

which is mainly due to the high cost of the battery. However, the electric solution has also some

advantages both in terms of fuel cost and maintenance cost.

The annual fuel cost of an electric vehicle represents approximately 30% of the fuel cost incurred by

a traditional car in the same timeframe. The estimation of the fuel cost for the traditional and the

electric version was done using the average petrol price in Italy and the average price of electricity

registered during the first three-month period of 2017 by the AEEGSI.

In addition, the annual maintenance cost related to Zoe is nearly 50% lower than the Clio’s one. The

main reason behind this evidence is due to the fact that the electric vehicle is characterized by a

lower number of components and it is less subject to wear.

The overall result which emerges, considering a time horizon of ten years and net of incentive

instruments, is that the TCO of the traditional car is approximately equal to 42.500 € while the

respective value in the case of EV settles on 50.200 €.

The Renault Zoe will cost 15% more than its petrol model if we take in consideration the TCO and this

data could also suggest the amount of incentive needed to make competitive the electric vehicle with

its traditional version.

22

Figure 11. Comparison between TCO of a traditional and an electric vehicle

This part dedicated to the evaluation of EV market will end with a further analysis of the incentive

schemes in place in some European countries, which considers, this time, the potential economic

value associated to each incentive policy. Indeed, the first part of the analysis was useful to

understand which are the main characteristics and attributes of the different incentive policies, but

if we want to make a more complete analysis and assess the real effectiveness of each incentive

policy, it is appropriate to esteem the weight of each incentive mechanism in terms of monetary

value.

In order to understand such aspect, it has been calculated the average incentive provided in each

selected country and for both BEV and PHEV models. The reasoning of this analysis is explained in

the section below.

2.6. Incentive estimation by country

Aside from the characteristics of the incentive scheme, it is also important to assess the incentive

policy’s “weight” in terms of monetary value which is potentially significant in determining the

effectiveness of the policy.

Hence it has been performed a comparative analysis of the incentive policies in place in each selected

country, aiming to identify the relationship between the amount of incentive disbursed and the level

of EV market development. The analysis takes into account seven European countries (France,

Germany, Italy, Norway, Netherlands, Sweden and the UK) and the average value of the incentive

was calculated for both BEV and PHEV.

15.35018.071

20.79223.513

26.23428.956

31.67734.398

37.11939.840

42.56133.000 34.721 36.442 38.163 39.884 41.605 43.326 45.047 46.768 48.489 50.210

0

10.000

20.000

30.000

40.000

50.000

60.000

0 1 2 3 4 5 6 7 8 9 10

€

Year

Renault Clio Renault Zoe

23

The Volkswagen Golf was considered to carry out this calculation; the choice of this model is due to

its availability in different types of engine power, from the petrol version to the PHEV and BEV

versions. The main characteristics of each model are reported in the table below:

Table 4. Characteristics of vehicles considered in the analysis

Volkswagen Golf Volkswagen e-Golf Volkswagen GTE

Vehicle type Petrol BEV PHEV

Engine power [kW/CV] 92/125 85/115 150/200

Engine displacement [cm3] 1.395 n.a. 1.395

Empty weight vehicle [kg] 1.171 1.510 1.599

CO2 emission [g/km NEDCa] 120 0 35

Fuel consumption [l/100km NEDC] 7 0 1,5

Electricity consumption

[kWh/100km] n.a. 12,7 11,4

Vehicle price excl. VAT 20.915 30.464 30.382

aNEDC: New European Driving Cycle

It is important to take into account all the information related to the technique characteristics of each

model, because in lots of the incentive policies, the estimation about the incentive is often related to

the engine power, the vehicle’s weight and the level of CO2 emissions. The computation formulas of

the incentives are based on specific limits set usually by a National body which deals with tax matters.

It is worth to notice how the price of vehicles varies among each country and the selected models

may not be available in all the European countries considered in the analysis. However, with the

objective to provide a more fair as possible comparison between the different incentive values, it was

assumed that each model considered in the analysis was also available in each selected country and

to prevent price differences among countries, deriving from the different pricing strategies put in

place by vehicle manufacturers, the price was maintained the same in each State.

Moreover, for what concerns the incentive estimation, the analysis takes into account just the

incentives released at national level while among use and circulation incentives, in particular the

24

deductions on tariffs, that may refer to a discount on the price for the highway toll or to the free

parking, were not considered as they are more difficult to quantify and compare.

All incentives examined refer to the fiscal year 2016 and their information come from ACEA, the

European Automobile Manufacturers’ Association.

The following graph shows the average value of the incentive for the EV, distinguishing between BEV

and PHEV, for each European selected country, highlighting at the same time the annual EV

registrations.

The amount of the annual EV registrations reported in the graph is equal to the average number of

registrations recorded in the past two years (2015-2016). The choice about this decision is that we

have tried to give a true representation of each market, while if we had only considered the

registrations occurred in the last year, they would have shown a picture of the markets strongly

influenced by the incentive policies implemented in the last year (see the case of Netherlands) and

so not a proper representation of the “real” degree of development.

Figure 12. Relation amid value of incentives and EV registrations in each selected country

The graph shows Norway as the leader of EV market also in terms of amount of incentives disbursed.

In the Scandinavian country, the amount of incentives seems to be correlated to their effectiveness;

in fact, Norway offers extremely generous incentives, about 14.000 € for BEV and nearly 7.000 € for

PHEV. The amount of BEV’s incentive in Norway is more than twice the average amount of incentives

for BEV recorded among selected countries while the given incentive of PHEV is the highest recorded.

A correlation between the average amount of incentives and its effectiveness it can be observed also

in the Netherlands; referring to our estimation, the value of the incentive for PHEV is the second

7853

4780

1500

9128

14260

4292

6800

3700 3780

1500

6418 6635

2292

4600

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

0

2000

4000

6000

8000

10000

12000

14000

16000

France Germany Italy Netherlands Norway Sweden UK

Ince

nti

ve e

stim

atio

n/c

ar [

€]

BEV PHEV EV registrations 2016

25

highest recorded immediately after Norway and this evidence could partially explain the huge

diffusion of this kind of vehicle in the country. It should also be remembered that in this analysis are

not taken into account tariff reductions related to parking and tolls, which, however, have seen a

strong implementation in both Nordic countries as described in the previous section.

This fact, if considered, will produce a further increase of the amount of the incentives granted per

vehicle remarking the strong relationship already observable in the countries between the amount

of the incentives and the EV market penetration.

The same relationship is also evident in the Italian case, but with an opposite effect; Italy posted the

lowest amount of incentives (1.500 € for both BEV and PHEV) and so it can reasonably explain the

low and poor diffusion of EV in the Italian automotive market.

Similar effects, but with a lower evidence, can be noticed also in France and Germany, countries

where the level of diffusion seems to be justified by the considerable amount of incentives.

The same reasoning is not highlighted in the remaining countries; for example, in the UK the average

amount of incentive disbursed for BEV is nearly 7.000 € and the respective amount for PHEV is

approximately 4.600 €. Both incentives are in line with the values registered in the other countries if

we exclude Netherlands and Norway, but the number of registrations achieved seems to be bucking

with this aspect.

The same bucking is emphasized in Sweden, which offers incentive in line with the rest of countries,

but it is the third country in the World for EV’s market share (2,4%).

In conclusion of this analysis, it is possible to trace the following key aspects and considerations.

From the analysis, it does not emerge a uniform incentive scheme among the different selected

countries, but the typology of the incentives appears somewhat mixed. Both direct incentives on

sales and incentives aiming to favour the use and the circulation of the electric vehicles coexist: the

first issued at a national level while the second at a more regional and local level.

The monetary value of incentives seems “fairly” homogeneous amid the main European EV markets,

but the diffusion of the electric car does not seem to be related only on the amount of the incentive

disbursed, even if in some countries like Norway and Netherlands this fact sounds evident.

If we exclude these two markets, in the rest of the countries, compared with a similar amount of

incentive paid, the diffusion of the electric vehicles looks heterogenous.

26

3. ANALYSIS OF THE ITALIAN EV’S SUPPLY

This section of the thesis has the aim to identify and describe which are the main characteristics of

the supply-side of the E-mobility industry. The analysis is performed taking into account the Italian

EV perspective and focusing on BEV models. First of all, in the analysis a description and an

identification of the automotive companies that have already developed their own electric vehicle

solution is performed. Such analysis refers to the numbers, types and models of the BEVs available at

the current state of the offer and it allows to estimate the actual magnitude of the supply.

Furthermore, analysing the industrial development plan of the automotive companies, the future

EVs’ offer is assessed by 2020. This will enable us to understand which are the main development

trajectories that car companies have in mind and it will permit to identify how their business models

will evolve.

3.1. Analysis of the current Italian EV’s supply

Nowadays the Italian EV market, as it was underlined in the previous section, is quite poor and less

structured if compared to most of all European countries. In Italy at the end of 2016, the EVs’ offer

was represented by 12 automotive companies and a comprehensive amount of 20 BEV models. The

representative automotive companies of the sample are, in alphabetic order: BMW, Citroën, Ford,

Hyundai, Kia, Mercedes, Mitsubishi, Nissan, Peugeot, Renault, Tesla and Volkswagen.

The first car companies that appeared on the Italian EV market in 2011 were Citroën, Nissan, Peugeot

and Renault. These companies introduced first the EVs in their own reference market and after the

quite good results and customers’ level of interest achieved, they introduced their respective models

in the Italian market.

These brands dominated the scene until 2013, when it was possible to buy an EV just from the

previous exposed automotive companies. In 2013 the market was updated with the entry of three

new car companies (BMW, Mercedes, Mitsubishi) that decided to ride the wave of E-mobility also in

Italy.

From this time up to 2016, the Italian EV market evolved again and they appeared on the scene in

sequence Kia, Volkswagen and one year later also Ford, Tesla and Hyundai.

During the last five years, there has been an impetuous supply growth; the number of active

producers in the E-mobility market has tripled and models’ offers were quintupled.

The following table reports the picture of the evolution of the electric vehicles’ offer from 2011 to

2016.

27

Table 5. Evolution of Italian EV market from 2011-2016

SEGMENTS 2011 2012 2013 2014 2015 2016 Growth

2011-16

A # Producers 2 3 5 6 6 6 300%

# Models 2 3 5 6 6 7 350%

B # Producers - - - 1 1 1 n.a.

# Models - - - 1 1 1 n.a.

C # Producers 1 1 2 3 5 6 600%

# Models 1 1 2 3 5 6 600%

D # Producers - - - - - - -

# Models - - - - - - -

E # Producers - - - - 1 1 n.a.

# Models - - - - 1 1 n.a.

F # Producers - - - - - - -

# Models - - - - - - -

J # Producers - - - - - 1 n.a.

# Models - - - - - 1 n.a.

MPV # Producers 1 1 2 2 3 3 300%

# Models 1 2 3 3 4 4 400%

TOTAL # Producers 4 4 7 9 11 12 300%

# Models 4 6 10 13 17 20 500%

As it is possible to notice from the table above, the EV models were classified according to their

segments. It was used the classification provided by the EU Commission which is based on a vehicle’s

classification by letter and more precisely we can identify the following segments:

- A-segment or “mini cars”, which identified city car hatchback;

- B-segment or “small cars”, which identified a class of car larger than a city car;

- C-segment or “medium cars”, which identified compact sedans with 2 or 3 volumes;

- D-segment or “large cars”, which identified medium to large size sedans;

- E-segment or “executive cars”, which identified large size sedans in 3 volumes;

- F-segment or “luxury cars”, which identified luxury large size sedans;

- J-segment or “sport utility car”, which identified SUV, 4x4 and pickup vehicles;

28

- MPV-segment or “multi-purpose vehicle”, which identified van and minivan;

Thanks to this sorting, it is possible to trace what has been the focus of EV market penetration

strategy in place by the various automakers.

The C-segment was the one that faced the biggest development in these 5 years. Both producers and

models increased six-fold highlighting the huge forces put in place by the automotive operators.

A-segment and MPV-segment also recorded a good expansion with the number of producers that

has been tripled while the models have grown about 350%, in the case of A-segment, and about 400%

for the multi-purpose vehicles.

The remaining segments do not seem to be very interesting for the industrial plan of the automotive

companies and in particular the B-segment is just covered by the Kia Soul, the E one by Tesla with its

Model S while in order to see an electric car in the J-segment we need to wait till 2016, year during

which it was launched in the Italian market the Tesla Model X.

The classification of EVs by segment seems to suggest that during these early years the automotive

companies have pushed their forces in the production of small/medium cars and multi-purpose

vehicles.

This strategy seems to be targeted to expand the offer for the consumers who use the car within the

urban network and so providing a car the more suitable as possible to flow into the city traffic in an

easy, comfortable way and with a lower amount of CO2 emissions.

Indeed, the choice to produce a small car looks the most appropriated for this type of utilization.

Furthermore, the major obstacles met by the producers regarded the autonomy of the battery, which

guaranteed, especially in the first specimens, a very low mileage. Moreover, this new technology

used, for most of the automakers, was something still in the “research” phase and so the

manufacturing processes required a lot of investments which would inevitably transmuted in a high

cost paid by the customers.

This factor could stay behind the willingness to address the offer to some niche markets already

accessible and more favourable to the development of the electric vehicles. Such markets could be

represented by firms operating in the large-scale retail trade, companies offering car sharing services

within large cities or by corporate fleet.

In these cases, the high investment cost could be endured with more plausibility and the companies

involved in these niche markets, which are characterized by a high utilization rate of cars, could take

more advantage in a long term perspective, thanks to the benefits connected to EVs and already

29

exposed when it was computed the TCO, such as the lower fuel and maintenance cost respect to a

traditional car.

In order to make clearer for the reader the just explained reasoning, a summary is reported.

The limited mileage suggests an utilization for the urban mobility; the best way to scroll in the city

traffic is through the use of a car that is small and therefore more manageable and easy to park; it is

also possible to relate the small car size with the high cost of investment; the high cost could

represent a lower obstacle in the diffusion for some niche markets, such as car sharing or large-scale

retail trade, characterized by a high level of car’s utilization and the use in city.

Hence the decision made by the automotive companies to run the market investing in the C-segment

and A-segment, mainly due to the low mileage factor, and the MPV-segment, mainly due to the high

purchase cost.

Figure 13. Flow of reasoning

This strategy adopted by the automotive companies was needed to penetrate the market and start

to make familiar and aware the customers about the new technology.

In the future, thanks to the continuous investments in R&D which will bring a drop of the vehicles’

price and an increase of the car’s performances, thanks to the greater awareness about the new

technology generated in the customers and to the increasing level of confidence, we will expect a

greater penetration of the segment which up to now, does not represent, or in any case in a reduced

way, electric car’s models.

We will discuss this part in the next paragraph dedicated to the evaluation of the expected offer’s

evolution.

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3.2. Evaluation of the expected EV’s supply by 2020

This section is dedicated to the analysis of the expected offer’s evolution. Such analysis was

performed taking into account the industrial development plan of the automotive companies and

doing researches on the Italian EV market through the use of interviews and data reported on the

principal automotive magazines and articles.

It should be stressed from the outset, how industrial plans bring back in all cases just pure electric

cars (BEVs), while PHEVs can be considered only as a state of “passage” with respect to the traditional

vehicles, waiting for a more widespread and capillary charging infrastructure.

We were left with a 2016 characterized by 12 automotive operators and 20 BEV models available on

the Italian EV market, which they covered comprehensively 6 out of 8 segments.

In the following table the change occurred from 2016-2020 is reported.

Table 6. Expected evolution of Italian EV market by 2020

SEGMENTS 2016 2017 2018 2019 2020 Growth

2016-20

A # Producers 6 6 6 6 6 n.a.

# Models 7 8 8 8 8 14%

B # Producers 1 1 1 3 4 400%

# Models 1 1 1 3 4 400%

C # Producers 6 7 7 9 10 66%

# Models 6 7 7 9 15 250%

D # Producers - - 1 2 5 n.a.

# Models - - 1 2 7 n.a.

E # Producers 1 1 2 2 3 300%

# Models 1 1 2 2 3 300%

F # Producers - - - - 1 n.a.

# Models - - - - 1 n.a.

J # Producers 1 1 2 3 5 500%

# Models 1 1 2 5 10 1000%

MPV # Producers 3 4 4 4 4 33%

# Models 4 6 6 6 6 50%

TOTAL # Producers 12 13 15 16 16 33%

# Models 20 24 27 35 54 270%

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From 2016 to 2020, according to the projections, we will assist to an increase in both number of

producers and models. The active producers active in the Italian EV market will pass from 12

operators in 2016 to 16 in 2020, registering an overall growth about 33%. On the EV scene will appear

as competitors of the already involved automakers, Opel, Audi, Porsche and Honda.

For what concerns the number of models the increase is about 270% by 2020, with the highest

growth which will register between the last two years. This evidence could mark that nowadays the

Italian EV market is not ready to sustain a considerable growth and moreover steps forward from a

technological point of view are needed and they will not arrive till 2020, when the predictions about

the price of the battery set a cost per kWh approximately equal to 200 €/kWh. (Bloomberg New

Energy Finance, 2016). The correlation between the EV battery cost fall and the increase of EV

models, will be analysed in the part dedicated to this aspect.

Looking at each segment, the segment recording the highest growth is the J-segment, which it will

be covered by 2020 from 5 producers which will offer 10 models. Again, the B-segment will see both

the number of automakers and models quadrupled, while the growth concerning the E-segment will

settle to a +300%.

As it was predicted, the EV’s offer will expand its borders going to cover in the next years those

segments which up to now had not affected the development of the E-mobility paradigm.

If this evidence is true for the B and J-segments, the same reasoning is not true for the F-segment

which does not seem to be included in the development plans of the automakers; it is expected that

in 2020 only one operator (Mercedes) will offer an electric model belonging to the F-segment.

The EV supply will continue to focus also on those segments which have already seen a strong

evolution during the last five years. The C-segment will be the most covered both in terms of active

producers (10) and both in terms of models (15 models are expected) by 2020. It is clearly in this area

where the operators will focus their efforts.

In the 2018 there will be also the possibility to purchase an EV belonging to the D-segment, thanks

to the entrance, in the Italian market of the BMW i5. The choice of BMW will be run in the following

years also by Honda and Hyundai Motor Group (Hyundai plus Kia), with the latter that declared it

wanted to bring just in 2020, 8 new models which will share amid D and C-segment.

3.3. Focus on the increase EV sales and the falling EV batteries cost

The EV market and its diffusion are strongly related to the expected trend of the cost of the batteries

in the future. The battery component may represent the most important part for an EV because it is

32

the one to which we could attribute the most significant performances of the vehicle that a consumer

usually takes into consideration: the autonomy and the power.

In the market, there are a lot of types of batteries and each type relies on its own technology. During

these years, we have seen Ni-MH (Nickel-Metal Hydride) battery, Lead-acid battery, the oldest

technology, and the Lithium battery, the most modern, but nowadays the technology that takes the

standard and so the one which is mainly used by automotive car brands is the Lithium Ion battery.

Such type of battery is characterized by a high flexibility, it can be built in a wide range of shapes and

sizes, and it is also lighter, thanks to the high charge density of the lithium ions, and less polluting

with respect to other types of technologies. Notwithstanding, the lithium ion battery present some

disadvantages and the most significant is that it presents a progressive deterioration even if it is not

used having a shelf life starting from the time of manufacture, regardless the number of

charge/discharge cycles.

As the standard evolved also the cost associated to the battery has seen an increasing drop during

these years. It is properly this aspect that is interesting to point out and moreover its relation to the

EVs’ offer trend.

Indeed, a lot of resources were dedicated to underline this relationship and each case study has

always underlined a linear relationship amid the cost of battery and the EVs offer. As it counts for the

major cost, a drop of the cost of battery produces a decrease of the cost to purchase an electric car,

hence making more attractive and increasing the overall EVs offer.

This correlation is highlighted by the next graph in which the trend of the cost of lithium battery is

compared to the number of electric models offered in the Italian EV market.

Figure 14. Comparison between expected trend of EVs offer and battery's price

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1013

1720

2427

35

54

0

10

20

30

40

50

60

0

100

200

300

400

500

600

700

800

900

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

# m

od

els

€/k

Wh

Average battery price EV's models offered

33

From the above graph, it is possible to observe the expected linear relationship. If in 2011, the

average cost of a lithium battery was equal to 1.000 €/kWh, the highest one recorded, it is also true

that during the same year the number of EVs model available in the Italian market is represented by

just 4 models. It is clearly evident that, as the average cost of the battery decreased year by year, the

number of electric vehicles available in the market gets increasing.

Nowadays the EVs’ offer is equal to 20 electric cars model and the average cost of the battery is

approximately set to 500 €/kWh.

An average drop of the battery’s cost is of 50%, it influenced the EVs’ offer, making it five times wider,

passing from just 4 models in 2011 to 20 models in 2016.

According to the information given by the McKinsey report, we have seen during the last five years a

continuous drop of the cost of the battery mainly due to the intensive activities in R&D that were

made in this field. As it is also suggested by the study, the majority of the cost reductions derived

from the improvements of manufacturing processes, which enabled to reduce the amount of scraps

and improve the overall quality, the standardization of the equipment and the high volumes of

production, which allowed to exploit economies of scale.

Still referring to the projections made by the study developed by McKinsey, the average cost of the

battery is foreseen to decrease till the value of 200 €/kWh by 2020. It is properly at that time that we

will have the widest diffusion of the electric vehicles in Italy and the offer, according to our

projections, will set equal to 54 models.

This data gives us an important indication about which could be the evolution of the electric vehicle

market, not only in Italy, but also at a Global level.

In fact, if the battery manufacturers will be able to reduce even more their cost, it is plausible to

expect a further expansion of the EVs’ offer. Elon Musk, Tesla CEO, declared that the battery price by

2020 could fall behind the 200 €/kWh expected, reaching around 100 €/kWh. In this case the EV offer

could be even higher than 54 models predicted until now; the EVs will become even more attractive

and the gap between the electric propulsion vehicles and the “traditional” ICE vehicles would be

eroded.

For this reason, the development of components and in particular the battery is watched with a

special attention by the automotive companies since it is undoubted that the battery’s cost is a

significant component of the EV’s total cost of ownership.

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Of course this factor is not the only one which we have to take into consideration and it cannot carry

alone a huge diffusion of the electric vehicles. Another important aspect the automotive operators

are also looking at, it is the development of an efficient and capillary charging infrastructure.

This aspect is less influenced by the battery price because it is not possible to identify a linear

relationship among these two factors. It might be interesting to observe, however, how a higher

number of electric vehicles in circulation on roads will exercise more pressure on utilities,

entrepreneurs and Governments who will be called to meet the growing demand for affordable

charging infrastructure and they should create an efficient system to meet those users’ requirements.

3.4. Evaluation of the strategy adopted by automotive companies

It is interesting to underline that the expected development of models and segments covered by the

availability of EVs is not the result of a homogenous growth supply by the various operators.

We saw how during the period 2016-2020, the EVs’ offer will bring to a meaningful differentiation

between business models put in place by the industry operators, while during the first five years from

2011 to 2016, the business models were in line between each automotive company.

The aim of this paragraph is properly to evaluate the E-mobility strategy adopted by each automotive

company in order to discover and highlight the difference objectives and development strategies.

Such analysis was performed creating a classification matrix characterized by two dimensions:

Number of market segments covered: this dimension highlights the number of segments in

which we can find at least one model offer by an automotive company.

Segment’s width: it corresponds to the number of EVs offered in each segment by an

automotive operator.

Each automotive company will be classified in the matrix according to these two dimensions and

therefore the strategy of each company will be evaluated depending on the placement that will get

inside the matrix and more precisely we will consider:

- For what concerns the number of segments covered, a high value if the number of segments

is higher than two; this means that the automotive company selected provides a model of

electric car in at least two segments of the market. A low value indicates that the company’s

offer covers two or less segments.

- Instead for what concerns the segment’s width, the threshold, in order to assess when an

automotive operator has a high or low value of this dimension, is set equal to the average

value of electric models for segment. So, we will say that an operator has a low segment’s

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width if for each segment covered by its supply, it will offer less than two electric vehicle

models. Conversely, a high segment’s width corresponds to a wide range of electric vehicle

models available for each market segment.

The matrix that came out is reported below:

Figure 15. Classification matrix

The first quadrant of the matrix, the so called “Specialist”, represents the set of automotive

companies which propose a “specialized” offer focused on a limited number of segments (at least

two), but extremely wide in terms of models.

The second quadrant, called “Complete athlete”, includes companies representing within E-mobility

a “mature” offer, so covering numerous market’s segments and offering for each of them many EV’s

models.

The third quadrant is called “Qualifying” and represents the operators offering an extremely low

range of electric cars. They focus on few segments and each of them is characterized by a low width.

Lastly in the fourth quadrant of the matrix, “Trials”, falls the automotive companies which thanks to

their range of EVs, cover a high number of market’s segments, but for each segment they offer a

limited number of EV models.

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3.4.1. Positioning of the operators by 2016

The first step, in order to forward the discussion on how the automotive companies’ strategies will

evolve in the next future, is the assessment of the actual positioning of the automotive operators.

In doing so, relying to the data about the Italian EV market offer exposed in the previous section, we

placed in the matrix each automotive company active in 2016.

This tool will allow us to understand how each automotive operator has approached the Italian

market and also it will permit to underline the possible different strategies among the automakers. It

should be stressed that the analysis focuses exclusively on BEV models.

The situation by 2016 is reported in the following graph, where the amplitude of the bubbles

represents the market penetration of each automotive company:

Figure 16. Positioning of the automotive companies in 2016

As it is possible to notice from the matrix, during the first period of diffusion, the automotive

companies adopted a similar strategy; in 2016 there are 12 automotive operators active in the Italian

EV market and they are substantially all concentrated in the first quadrant (Qualifying).

This evidence underlined their orientation of focusing on just few electric car models distributed

among a limited number of market’s segments.

In this phase, it seems to prevail in the operators’ mind a sense of scepticism which is more evident

in the group of automotive companies which are more to the left in the graph. Such automakers

BMW

CITROEN

FORDHYUNDAI

KIA

MERCEDES

MITSUBISHI

NISSANPEUGEOT

RENAULT

TESLA

VOLKSWAGEN

Segm

ent'

s w

idth

Number of market segments covered0 1 2 3 4 5

High

Medium

Low

37

(BMW, Ford, Peugeot…) decided to penetrate the market going to offer just one electric vehicle in

one segment. This choice can be related on the one hand to the willingness to concentrate their

forces in just one “project” aiming to achieve the maximum quality and return, but on the other hand

it could be related to the low level of confidence that operators experienced about the real

development of the E-mobility paradigm in Italy.

Instead, they seem to show a higher level of confidence, the automotive operators like Renault,

Citroën, Nissan and Mercedes which can be identified to the right respect to the previous group.

Here the strategy of penetration of the market is the same in general, but it is characterized by a

higher number of segments covered (2) and consequently by a wider electric vehicles’ offer. For this

reason, it is possible to collocate three automotive companies (Renault, Mercedes and Citroën) in the

“Specialist” quadrant, while the remaining three companies (Nissan, Volkswagen and Tesla), although

their equal number of segments covered, fall in the first quadrant.

It is interesting to observe how within these automotive companies it is possible to identify operators,

like Renault, Citroën and Nissan, which are present in the Italian EV market for more time (the first

model dates to 2011). Hence their “wider” range of EVs could be explained by the greater

permanence experienced by these automotive operators in the market which allowed them to better

discover the consumers’ purchasing behaviour and to better understand what were the dynamics of

the market.

In the right quadrant, there is also a group of automakers such as Mercedes and Volkswagen; they

cannot be defined as the precursors of the E-mobility in Italy because their first models arrived

around 2013-2014, but however they were able to take a good slice of the market.

Here their strategy could be related to the fact that they have adopted a more precautionary

approach, leaving for the very beginning to the other automakers the task to penetrate the market

and create the consumers’ awareness about the new technology; in doing so, few years later when

they decided to enter the market, they were immediately offered two models of EVs belonging to

two different segments exploiting the work done in terms of orientation and consciousness to the

consumers by the first automotive players.

Special case is that of Tesla which is the only fully electric operator and so its development strategy

is strictly connected to this fact.

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3.4.2. Positioning of the operators by 2020 and analysis of its evolution

The positioning of the automotive companies by 2020 was assessed taking into considerations the

forecasts made by the operators about the release of electric models in the future. Such analysis was

developed directly interviewing the automakers and referring to the information reported by the

main sources of information in the field (websites and articles).

In the following graph, it is represented the situation expected by 2020 and the positioning of each

automotive operators which was performed using the previous exposed matrix.

Figure 17. Expected positioning of automotive companies by 2020

The situation by 2020 appears completely different if compared the one observed in 2016.

Firstly, the number of automotive makers active in the Italian EV market rose to 16 players thanks to

the entrance in the market of Audi, Honda, Opel and Porsche. This will lead to a consequently increase

of the competitiveness in the market and to a wider EVs’ offer from which the customers could gain

a positive advantage.

Secondly, it looks also evident the effect of greater dispersion of operators in quadrants. The next

figure highlights the change of position of each automotive active player in the Italian EV market

between the actual positioning and the expected one in 2020.

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Figure 18. Change of positioning amid 2016-2020

Thanks to this figure it is possible to assess the development trajectories and so the strategies issued

by each automotive company.

In 2020 there will be 4 automotive companies, the 25% of the total, which is expected to populate

the “Qualifying” quadrant of the matrix.

Among them three automotive operators, Honda, Opel and Porsche, do not present any EVs’ model

in their offer nowadays, but just in the next future they will enter the Italian EV market.

However, their penetration strategy will not be an aggressive one and they will cover just one

segment of the market with their electric cars’ models. More precisely Honda will offer an EV

belonging to the D-segment, Opel will present an EV belonging to the C-segment while Porsche will

approach the Italian EV market focusing on the E-segment.

The other company to position itself in the first quadrant is BMW, which is also the only one that

remains in the same position as the one underlined in 2016. Indeed, BMW will extend its offer by

introducing just a new electric vehicle which it enables the company to compete with its rivals also in

the D-segment.

The quadrant denominated “Specialist” will be represented by 5 automotive companies in 2020,

featuring the 31% of the total number of operators.

Most of them and in particular 4 out of 5 (Ford, Kia, Hyundai and Mitsubishi) they will come from the

“Qualifying” quadrant. Hence it is expected that such players will increase their EVs’ offer in segments

where they are already active or at least they will introduce new models in just one more market

segment.

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This is clearly the case of Mitsubishi, which thanks to its good reputation as manufacturers of off-

road vehicles, will be able to offer two new electric vehicles in the J-segment in 2020. The same thing

will be seen in the case of Hyundai Motor Group, composed by Hyundai and Kia, whose senior vice-

president, Ki-Sang Lee, declared the ambitious project of the Korean company to introduce in 2020,

26 new vehicles with zero emissions (Greenstyle, 2016), among which 8 models will see their

introduction also in the C and D segment of the Italian EV market.

The last automakers in the “Specialist” quadrant is Renault which is the only one that remained in the

same position of 2016.

This strategy seems to underline the willingness of the company to still focus its efforts on the already

existing models going to improve their performances in order to reinforce its positioning and increase

the sales.

The quadrant which is expected to be the most crowded one in 2020, is the so called “Trials”

quadrant. Even 7 operators are expected to be placed in this part of the matrix and so they are all

characterized by a strong willingness to cover a high number of segments with their EVs’ offer.

Nowadays, between the automotive operators that can be classified as “Trials” in 2020, only Audi

does not present a BEV in its offer. The German brand will ride the E-mobility in Italy starting from

2018 when in the Italian EV market it will be available the electric version of the Q6 and by 2020 it is

expected to extend its offer providing an electric model also in the C and E-segment.

The rest of the quadrant is characterized by two players (Mercedes and Citroën) which come from

the “Specialist” quadrant, while four companies (Volkswagen, Tesla, Peugeot and Nissan) changed

their positioning moving from the “Qualifying” quadrant.

Hence it is expected by 2020 that these operators are going to enlarge their EV’s offer going to

operate in market segments in which they are not currently active and they will propose few models

(no more than two) for each new segment targeted in their development plans.

It is interesting to stress the fact that the “Complete athlete” quadrant of the matrix will be populated

neither by 2020.

This is maybe the most meaningful aspect because it highlights the absence of operators which have

embraced with significant decision the E-mobility development, at least in Italy. The decision not to

involve themselves heavily in the diffusion of electric cars in the Italian market, could be linked to the

poorness of the Italian regulatory framework in terms of incentives and moreover to the charging

infrastructure, which can be considered as a central factor in this vision.

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Indeed, the infrastructure, at the current state, is not dimensioned and it is not so efficient to satisfy

a huge development of electric vehicles’ utilization.

This analysis of the EVs’ offer allow us to state some important final considerations.

If it is true on the one hand that the increase of the number of EVs in the future is uncertain, it is also

true that they seem to predominate two different types of orientations, which are strategically

different:

One orientation, which we can call “focusing strategy” and selected by Hyundai, Kia,

Mitsubishi, Ford and Renault, plans to concentrate all efforts in just one segment, in most

cases the C-segment, namely that of the compact sedans with two or three volumes. The

segment is apparently considered the most suitable one, in order to penetrate the market (as

it was also pointed out in the previous section) and so the willingness of the companies in

question is to make electric the upcoming new models referred to this segment.

The “focusing strategy” enables to focus all efforts, from the research and development to

the activity of models’ design and concurrent engineering, which in particular involves the

battery manufactures and manufacturers of electric motors, towards a unique objective

which is the one to achieve a greater effectiveness.

If on one hand, in case of success of the selected market segment for the diffusion, the boost

given to the automotive companies that embraced this strategy will enable them to gain an

extremely competitive advantage and it will allow to repay the resources and efforts put in

place until now, on the other hand, in the case in which the selected segment will have a weak

reaction, the risk associated to this strategic decision will have a significant impact on their

businesses.

All resources and efforts, both in terms of money and time spent in order to guarantee the

most effective and suitable solution, will be vain and for the automotive operators would be

difficult to quickly reconvert the electric models into their respective “traditional” solutions.

The remaining companies, mainly Mercedes, Citroën, Nissan, Tesla, Peugeot and Audi, are

characterized by a strategy, which we can call “diversification strategy”, related to the

diffusion of EVs not just in one segment but towards a higher number of them. This strategy

normally contemplates the development of a limited number of EVs’ model, one or maximum

two, for each of the market segments covered.

The choice of diversification has diametrically opposite advantages and disadvantages with

respect to the focusing strategy. The option to have more segments covered by the offer

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generates a limited effects and risks in terms of investments. A wider diffusion of the offer

entails lower risk in case of failure of one selected segment, giving the possibility to the

companies to continue its diffusion of EVs in segments which better respond to their offer.

Moreover, it allows to share the investment made in the phase of research and development

among a higher number of different models lowering again the impact on the business’

company in case of failure of one segment.

The current strategy has also some disadvantages with respect to the previous strategy.

The main disadvantage is related to the greater effort that companies should take in the phase

of development of EV’s models.

Indeed, it will require to the automotive companies a wider knowledge of the market if they

want to be effective in each selected segment.

Companies should provide for each segment an electric car model that allows them to

penetrate the market and guarantee a good return on the investment. Hence, the crucial role

is represented by the EV’s model development.

If we consider a parity of investments in both strategies, the solution proposed could be less

effective compared to the one offered by companies operating with a focusing strategy,

because the same amount of money will be used to cover a higher number of market

segments.

It is also true that due to the lower level of risk, these companies probably do not aim to

provide the best solution in each market segment and they may prefer being active in a higher

number of segments even if they do not represent the best solution in none. Here the

objective should not be the achievement of the leadership as main brand in each penetrated

segment, but it could be more related to the achievement of more consumers as possible.

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4. ANALYSIS OF THE ITALIAN EV’S DEMAND

This section of the thesis is dedicated to the evaluation of the demand for E-mobility in Italy. This

aspect is firstly evaluated considering resources and studies coming from the literature and secondly

evaluating the registrations data about EVs coming from the Italian market. Then the results of both

analysis will be assessed together and some final considerations about the most significant aspects

characterized consumers’ demand will be provided.

Moreover, the analysis of demand will continue with the identification of some niche markets whose

characteristics may promote the development of electric mobility and where the transition to electric

mobility seems to be initiated. For each of the niche selected market, several case studies which have

seen the adoption of the electric vehicles will be provided and the major barriers and advantages

assessed through this analysis will be underlined.

4.1. Consumers’ demand

The base of each business is represented by an analysis of the opportunities and threats that are

present in the external environment. This analysis consists in assessing the set of actors and forces

that can affect the success of firm’s strategic decisions. There are two levels on which such analysis

can be performed: one level refers mainly to an examination of the socio-economic context while the

other one accounts an analysis of the market environment. It is properly at this level that companies

need to monitor the actors which may affect the economic results of enterprises.

Among these actors, which mainly referred to clients, competitors and suppliers, the customers

represent one of the most important entity. Indeed, the study of the market is finalized to identify

the best tools to meet the needs and desires of customers and hence company must first study the

behaviour of consumers and understand which factors could influence or determine them.

As it is possible to notice from this brief introduction, understanding the consumers’ needs and so

determining the consumers’ demand is an important element to assess in each type of business and

market.

Companies are required to focus on this aspect in order to be effective and profitable in their

businesses and their efforts should be aimed at following as much as possible the request of their

clients.

This analysis enables to point out the market opportunities and then these opportunities are needed

to be evaluated more in detail, on the one hand through the estimation of the actual and future

44

demand, and on the other hand through the identification of market segments, that are groups of

clients characterized by preferences and behaviours relatively homogenous.

The aim of this section is to understand the consumers’ demand of EV in the Italian market. In this

way, it will be possible to have a perception of how significant could be the penetration of the E-

mobility paradigm in Italy and how this market could evolve in the future.

4.1.1. Evaluation of consumers’ demand based on the literature

Consumers’ demand, as it was highlighted in the previous paragraph, is strongly dependent on a

series of social, geographical, cultural and political factors. These factors are perceived differently by

each cluster of customers according to their different and specific characteristics (age, nationality...).

For this reason, the analysis should be the more precise and punctual as possible being crucial for

each company to understand to which cluster of customers its product is offered.

In this part the analysis of the consumers’ demand for electric vehicle will be performed taking into

account the results coming from countless studies and analysis carried out in this field.

A lot of articles and reports were published during these years targeting the main factors behind the

characteristics of consumers’ demand for electric vehicles. The majority of these studies referred to

the most developed countries in the World, such as US and China, and also there are also a lot of

reports concerning the European Union. In this part the focus was on studies which report analysis

of the Italian market since the customer’s demand is strongly affected by the previous exposed

factors and so one barrier could be perceived high by an Italian customer while it could be perceived

with lower importance by customers coming from another country.

Hence the literature considered in this section refers mainly to studies launched by the European

Union in which the attitude of the European car drivers toward the electric vehicles is analysed among

different European countries, including of course Italy which is the goal of our analysis.

The first report took in consideration was a study launched inside the “Green eMotion” project by

the Vice President of the European Commission and Commissioner for Transport.

Such study has had the aim to identify the consumers’ preferences and attitudes toward EVs in

different European States, among which also Italy, and it allowed to give a general perspective of the

main features and preferences toward which consumers estimate their willingness to demand for an

electric vehicle and so find out the main features behind demand models.

The data concerning the Italian case were collected through a survey in which it was asked to the

selected sample to indicate which are the main characteristics of an EV that they were looking for.

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The result of the answers, attributable to nearly 5.000 respondents, identified as the most critical

factor, was the purchase price, which is considered too high by most of the consumers.

This barrier was estimated as the most critical one also in the other selected countries, highlighting

the fact that consumers are particularly sensitive to the price of EV.

The second most important barrier perceived by customers is the driving range. This aspect translates

in “range anxiety” is considered a big issue and so it can be identified as one of the major reasons for

the low EV penetration in the market.

The study identified the reason of such high value under the perception that consumers have about

the minimum battery capacity required for their needs. It was possible to point out how consumers

are usual to overestimate the minimum battery capacity requirement when they were asked to

define this value in order to consider the purchase of an EV. This overestimation is attributable to the

way in which consumers perceived this barrier and the study showed how the gap between the

minimum requirement indicated by customers and their real needs is quite huge. Consumers when

required to indicate the minimum battery capacity they probably thought about the peak event of

driving that they have experienced and their behaviour is strongly based on their current vehicles,

which is an ICE in nearly total of respondents, leading consumers to overestimate their true needs.

It is also interesting to observe the different level of demand elasticity related to each attribute. In

Italy, the consumers’ demand present higher level of elasticity according to the purchase price while

the demand elasticity with respect the driving range is lower.

Moreover, the willingness to pay for a higher driving range is affected by different car sizes. In the

case of medium or large vehicle, customers are willing to pay a high price in order to rise the driving

range. Instead, they are not willing to pay much for small cars since the main usage of these models

occurred within the city and so where the driving range is considered a less important barrier.

The car segment is also important for consumers when they are buying a new car; the study

highlighted that consumers are more favourable to buy an electric vehicle in case of small size cars

while the probability to buy a luxury EV is very low. Moreover, the probability to buy an EV grows if

the electric car is going to represent the second car of the consumer, because in this case the “extra”

mobility needed can be guaranteed by the other car that is represented by an ICE vehicle.

If the purchase price and the driving range represent very significant barriers to the adoption of EVs,

it is possible to notice the Italian consumers’ level of environmental sustainability. Among the

European States selected, Italian customers expressed a higher value related to this factor and they

showed a high willingness to pay in order to reduce the GHG emissions. This could be an important

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factor to boost the development of the EV market even if consumers perceived a high level of

scepticism about real diffusion of EVs.

The availability of charging infrastructure is certainly a factor which was underlined by respondents

as a significant aspect for the development of EV. Regarding the characteristics of the charge, the fast

charge was considered an important factor by consumers, especially by those who live in a city centre,

affecting significantly their choice to buy an EV.

Another important study was performed by the JRC (Joint Research Centre) about the attitudes and

preferences of European car drivers towards EV. This study was conducted in 6 European countries,

among which Italy, and for each State it was investigated the level of attitude of European consumers

related to electric cars. We are going to focus on the results reported in the Italian case.

Firstly, this study analysed the level of confidence experienced by the customers about EVs and the

main characteristics of EVs which influenced their decisions to buy this type of solution instead of a

traditional car. The Italian sample declared to be familiar with EV and showed a higher level of

awareness and interest compared to the other countries. The questionnaire submitted to

respondents allowed also to highlight the main features considered by consumers about EV.

The results showed that the purchase price represents the most important EV’s features and it is

more rebadged in the case consumers are more willing to buy an electric car. The price is clearly the

priority factor to improve underlying also by the consumers’ opinions about Government incentives

which are considered fundamental to promote the diffusion of EV. In the mind of the customers such

incentives are needed to lower the high obstacle identified in the purchase price.

The second most significant features consumers are looking for at the time of purchase an EV is the

distance that they should be able to cover with one recharge, and so the driving range. This aspect is

more preeminent in the case consumers have a high familiarity with the electric vehicles.

Other features such as the recharge time, the possibility to recharge the vehicle at home are also key

factors but they present lower level of importance if compared to the two-previous exposed.

On the other hand, the study showed that consumers do not assess significantly the performances

of the electric car, such as the maximum speed and acceleration.

Finally, we considered a paper which discovered the “quality, environmental and economic factors

influencing electric vehicle penetration in the Italian market”. An empirical investigation was

performed through a survey in order to understand and provide an overview of the main barriers

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affecting the consumers’ choice to purchase an EV and which are the main attributes about an EV.

Those attributes were evaluated and classified into three categories: economic, quantitative and

technical, environmental and practical ones.

Each factor considered in each respective category was valued by consumers associating a score from

1, which indicates not important, to 5, very important.

The analysis showed that the main characteristics considered by consumers when buying an electric

vehicle are related to the economic category. In particular, the study revealed that the main

economic aspects concerns the fuel consumption, the fuel price and the purchase price while other

aspects, as the flat rate contract and the free parking are considered less noteworthy and a lower

score was associated to them.

The other two categories are also considered important by customers. Among qualitative and

technical characteristics, the reliability, the safety in case of collision and the driving range are the

top rated aspects by customers while they are less influenced by the acceleration, speed and brand

of the electric vehicle. Lastly for what concerns the environmental and practical aspects, the highest

values are attributable to the number of charging station, the possibility to lower significantly the

emissions of GHG and the availability to charge the electric vehicle at home. These listed

characteristics represented the main features of an EV that consumers valued in order to purchase

an electric car.

The study also reported the main barriers to the adoption of EV perceived by Italian customers. At

the first position in order of importance, the investigation reported the purchase price, considered

also in this case too high and the most affected barrier, the low driving range and the lack of charging

stations.

Other factors such as the design and the loyalty to the brand were considered less important by the

sample.

4.1.2. Evaluation of consumers’ demand based on registrations data

The features of the demand for E-mobility is also analysed considering the data about registrations

referring to the electric vehicles in the Italian market. These data were taken from the Unrae, “Unione

Nazionale Rappresentante Autoveicoli Esteri”, website and the number of vehicles registrations

focuses in particular on BEVs.

In Italy, the total demand of electric vehicles hence the number of new electric vehicles registrations

was equal to 1.375 units in 2016 registering a drop of 5,3% respect to the previous year.

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Despite this decreasing trend occurred during the previous two years, the demand of electric vehicle

experienced a huge growth, over four-fold, from 2011-2016.

A way in which it could be possible to assess the characteristics of costumers’ behaviour, it could be

the analysis of the EV market registrations and, amid this information, going to look at the segments

which were particularly involved in this huge demand growth.

Referring to the data provided from Unrae.it about the Italian automotive market, it is possible to see

which are the main models of electric cars that were sold during these years on the market.

The most sold EV was the Nissan Leaf with approximately 1.200 units delivered, followed by the

Renault Zoe (about 688 units), the Smart Fortwo, BMW i3, Citroën C-Zero, Peugeot Ion and Tesla

Model S.

What it is interesting to observe is that in the top positions of this ranking are placed models

belonging to the C-segment; C-segment is representative of compact sedans with two or three

volumes and it is the segment that registered the highest number of EV registrations during the last

5 years. In the last year, the EVs belonging to the C-segment represented approximately 50% of the

total annual electric vehicle registrations, underlined the strong interest demonstrated by consumers

for such segment.

The remaining 50% is principally attributable in equal part to the A and B-segment (city car and small

car) while just a 10% referred to the luxury cars. This last segment is just covered by Tesla’s offer and

the total number of registrations refers to the Tesla Model S.

The repartition of the sales per market segment could give us the first suggestion about how the

consumers behave in terms of E-mobility demand.

First of all, the growing number of green car sales highlights the strong interest expressed by car

drivers in turning sustainable. The purchase of an electric vehicle is a choice and an investment

characterized by a significant potential both in terms of convenience – considering the steady

increase in the price of conventional fuels – that in terms of substantial environmental contribution

to the Earth and ecosystem. If it is true that there is a convenience in terms of operating cost, such

as the lower fuel and maintenance costs experienced by an EV with respect to a traditional engine

car, it is also clear that the purchase price of EV is significant and higher respect a traditional vehicle.

This aspect seems to overcome the willingness to be environmental friendly and it could also explain

the orientation of the consumers’ demand.

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Secondly, looking at the registrations of EVs for segment, it is possible to underline the consumers’

preferences for small-medium electric cars. This choice could be related to two major evidences: the

high purchase cost and the low driving range that characterized electric cars in general.

For what concern the purchase price, electric cars belonged to the A and C-segments are

characterized by the lowest purchase price on average amid the whole electric cars’ segment. This

characteristic is mainly attributable to the lower performances provided by these types of models.

Indeed, small-medium sized vehicles and subcompact cars are designed for use mainly within the city

and for an everyday use.

Customers selecting these segments are in search of a solution that can meet their requirements in

the cheapest way and that makes them to be environmentally sustainable at the same time.

Customers’ demand is prevalently addressed to an electric vehicle that can provide with a reasonable

higher cost the same performances guaranteed by a traditional vehicle.

The electric cars, in this sense, are required to guarantee a minimum driving range that can allow the

customer to continue to perform its everyday actions and ordinary journeys, such as going from home

to the work place or to shopping centre and without radically changing its behaviours. In the mind of

consumers, the driving range could have less importance if the car is being used within the city and

so in a context in which trips are characterized by low distance. For this reason, they are not willing

to purchase an electric car that could provide them a wider driving range, and in this way allowing a

different utilization (for example using the electric car in order to go in vacations), but to which is

associated a higher cost. It is also possible to link the limited use within the city borders to the re-

charging infrastructures available in the area. The current situation of the charging infrastructures

could also be one important aspect which affects consumer’s demand on those specific segments; in

the city in fact it is more likely to find a charge station than in remote areas.

Consumers’ demand does not seem to be strongly driven by the performances of EVs. Again, the

repartition of registrations by segment could denote how consumers are oriented to the purchase

lower performances’ vehicles, but that is to be due to a lower purchase price.

Comparing the main attributes of a Nissan Leaf with a Tesla Model S will make this evidence clear.

The Leaf costs on the Italian market around 30.000 €, comprehensive of battery, and it can guarantee

around 200 km of driving range and a maximum speed of 140 km/h. The Tesla Model S is sold on the

Italian market at a price approximately equal to 70.000 € and it guarantees 500 km of driving range,

four-wheel drive and a maximum speed about 225 km/h.

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The Tesla costs about twice as much the Leaf and it provides approximately more than double the

driving range. If a consumer chose a Tesla, he is going to receive a car that is closer to the

characteristics of a traditional vehicles, but however the consumer does not seem to justify the best

performances with such a high price. The consumer’s demand is focused on a typology of an electric

car that will not provide the same performances of the Tesla Model S, but despite the lower price, it

will able to guarantee “basic” mobility requirements.

Moreover, the barrier of the purchase price and the consumers’ willingness to choose in general

more affordable and basic model instead of more innovative solutions that were released on the

market just in the recent past, they can be marked by the scepticism that customers feel about the

electric mobility.

The data show how the most diffused and sold electric vehicles are the ones that were also the first

to be marketed. This evidence could suggest that consumers are doubtful and suspicious about the

new models arrived on the market and they prefer to buy electric vehicles which have more presence

on the market and which are so considered as the most “secure” and “convenient” both in terms of

performances and investment.

The first fourth models sold on the Italian EV market, Nissan Leaf, Renault Zoe, Smart Fortwo and

Citroën C-Zero were also the ones that were marketed firstly in the Italian market (their release in

fact dates back to 2011). Other car brands such as Volkswagen, which entered the EV market in 2014

with its models Up and e-Golf, failed to have the same success of the other automotive companies

which were already active for some years on the market.

Indeed, although they offered models belonging to the same segment of their “older” competitor,

they have not been able to reach the same level of sales.

This aspect could be explained by the fear and scepticism expressed by consumers towards new

models and in this analysis it also appeared relevant the strategic role represented by the “word of

mouth marketing”. We could assume as a result that the consumers’ demand is affected by opinions

expressed by the early adopters.

The focus on more established models is also evident if we have a look at the sales of Tesla in the

Italian market. Although we have already underlined that the most important reason of the low sales

is attributable to the high cost, another reason of its quite small success can be linked to its lower

presence on the Italian market and to its innovative thinking expressed.

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Despite Tesla can be considered as the most developed automotive company in terms of electric

vehicle since it based its businesses only on this type of engine propulsion, during the first year of

sales Tesla recorded just 19 models sold, far below the overall demand of electric vehicle.

Year by year the brand has consolidated its position giving way to get known through test-drive and

events by consumers. This, notwithstanding the high purchase price and its belonging to the luxury

segment, has allowed consumers to get more familiar and trustful about the product and it allowed

to rise its sales entering the top ten best-selling electric cars in Italy.

4.1.3. Final considerations about consumers’ demand

The analysis of the literature and data coming from the market allowed us to point out some

important considerations about how the consumers perceived the characteristics of the electric

vehicle and the main features that characterized their demand.

Firstly, all the researches and findings reported as the most significant barriers, affecting consumers’

demand for EV, are represented by the purchase price and the driving range.

The purchase price is considered too high by the majority of the customers and according to their

opinions it does not reflect the real attributes of the EV, whose performances and in particular the

driving range, are considered too weak in order to attract their interests.

Consumers’ demand is oriented to models characterized by relatively low prices and to electric cars

which can satisfy their basic requirements in terms of mobility.

Secondly, another important point which affects consumers’ demand is connected to the charging

infrastructure. In particular, the number of charging stations and the possibility to charge the EV at

home are considered as the most important features in this sense and consumers care strongly about

these facts when purchasing an electric car.

Thirdly, the other characteristics and features of vehicles, such as the maximum speed, acceleration,

the number of optional available, the brand and design are estimated as less important by consumers.

Even if the values of these characteristics of EVs are better if compared to the ones of their respective

traditional vehicles competitors, they are not sufficient to guide the consumer demand toward green

vehicles.

4.2. Exploration and assessment of the niche markets

The former part allowed to understand how consumers behave in terms of E-mobility and point out

the main barriers affecting its adoption. Thanks to these results it was possible to discover some niche

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markets in which those barriers could be overcome and so the adoption of EVs could be partially

favoured.

The focus on such niche markets is aimed to assess which could be the real and future potential of

the E-mobility in Italy. Such markets could be seen as “experimentation markets” where the demand

of electric vehicles could be consistently due to their characteristics and so the diffusion of electric

cars could start from these places and then expand in subsequent years, when those barriers will be

overcome also by other actors.

The niche selected markets were:

- The Public Administration;

- The corporate fleet;

- Car sharing service providers.

All these targets are characterized by a lower resistance to the electric mobility thanks to the lower

impact of EV’s barriers and these benefits are also represented by information coming from the

reality which has seen these markets as the first ones which embraced the E-mobility paradigm.

The evaluation was done, relying the research to a sample of 37 cases of partnership/project which

had seen the adoption of electric vehicles in each of the three niche markets.

In the present thesis, the term “project” is used to indicate all the cases which foresaw the adoption

of electric vehicles even in those cases in which the implementation of EVs was the results of a

commercial supply. The cases under the study are the results of desk-resources and they refer to a

time span ranging from 2011 until 2016.

These cases were divided in three macro groups in order to point out the characteristics of the

projects according to their time of implementation. The division was done in the following way:

Phase 1: in this phase are grouped the projects which were made by 31 December 2013.

Phase 2: in this phase were considered projects whose implementation occurred amid 1st

January 2014 and 31 December 2015.

Phase 3: in this phase were ranked projects developed in 2016.

This classification will enable to understand how the business models have evolved during these years

and it will allow to characterize each phase underlying the main characteristics. Such an analysis will

point out for each phase, the main actors involved looking particularly at which kind of business they

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belonged to, the number and nature of the actors and the objectives that led to the adoption of

electric vehicles.

At the end of this analysis, some final considerations will be performed, about the way the business

models of these projects have changed.

It should be emphasized that, for the sampling nature of the data collected, these projects are not to

be considered as “best practices”, but as examples of application of a particular model that is found

in the reality.

4.3. Analysis of the demand business model

As seen above, the sample analysis involved a total of 37 projects divided temporally as shown in

figure 19.

December 2013 PHASE 1 9 projects

December 2015 PHASE 2 16 projects

PHASE 3 12 projects

Figure 19. Projects' temporal division

In the following parts for each of the time phases considered, it will be showed the result of the

analysis of the projects and business models adopted, preceded by the entire list of the projects

belonging to the sample, in order to allow the reader any future investigations.

4.3.1. Analysis of business model: Phase 1

The first cases that have seen the introduction of electric vehicles in the companies’ activities can be

dated to 2011.

The following table reports the cases which refer to the phase 1:

Date Main actors involved Object

Mar-11 Hertz e Renault Hertz Global Electric Vehicle

Jun-11 Smart e Enel e-mobility Italy

Dec-11 Maggiore e Trenitalia Ecorent

Jun-12 Hertz, Ntv e Smart ElectriCity

Jun-12 Argenta e Renault E-Moving

Dec-12 Nissan, Hertz e Ikea Electricity

May-13 EP, Renault Project restaurant eco-frendly

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Oct-13 Ipercoop di Euroma2 e Renault E-commerce ZEV

Dec-13 Comune di Padova, Renault e ABB Car sharing Padova Figure 20. Projects considered in the phase 1

The average number of actors involved in the projects of this first phase is amid two and three actors.

In all of these cases is involved: a client, which represent the entity requesting the service and a

supplier or contractor, which provides the service and so in this case the electric car are involved.

During this first phase 7 out of 9 projects, about 80%, were conducted by private firms while in just

two cases the client was represented by a Public Administration. Among private clients we can find

mainly car rental companies which have probably seen in the electric mobility a factor that could

differentiate their service from those ones offered by their business competitors and so gaining a

competitive advantage.

Hence the finality of these projects is the creation of “green” car sharing services which could attract

new customers more inclined to the environmental issue and to the innovation.

In the other cases the client is represented by a private firm, this choice toward electric mobility is

more attributable to their greater propensity to be environmental friendly since in these cases the

goal could be related to the companies’ willingness to create a “green image” of them and make their

customers more sensitive toward this issue, rather than gain a competitive advantage on their

competitors.

This evidence is also shown by the magnitude of the projects in terms of number of electric vehicles

purchase; in the cases in which the client was a car rental company, the involvement in that sense

was much higher than in the other cases in which the number of electric purchased vehicles was just

equal to two or three specimens.

For what concerns the supplier of the electric cars the 88% of the cases has seen the direct

involvement of an automotive company, whereas in one case it was a car rental company that directly

provided the electric vehicles to the client.

Renault represents the most involved automotive company, to which are attributable more than a

half of the cases, but also Nissan and Smart were present.

The effect of such projects affecting mainly the transportation sector, approximately 55% of projects,

while the remaining 45% is attributable to the large-scale retail channel (33%) and to the restaurant

sector.

This data looks evident because the transportation sector is the one that can mostly benefit from the

adoption of electric vehicles since its business is based on the mobility. In this type of activity, the use

of electric vehicles is seen as a possibility to reduce the operating costs experienced by firms as

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concerns the fuel and maintenance costs of the car and also it can provide an additional service and

a positive image to the firm being environmental friendly.

4.3.2. Analysis of business model: Phase 2

In this paragraph, we are going to consider the cases that have seen the adoption of electric vehicles

in business activities from the beginning of 2014 until the end of 2015.

A list, sorted by name, of the projects mapped for phase 2 is shown below in the table:

Date Main actors involved Object

Jan-14 Trenord e Regione Lombardia E-Vai

Feb-14 Napoli Città Intelligente e Renault Ci.Ro.

Jul-14 Regione Umbria e Renault Umbria Green Card

Jul-14 Mitsubishi Motors e Carabinieri Project with Arma dei Carabinieri

Oct-14 URI e Nissan Via col Verde

Oct-14 Peugeot-Citroen e Sea Electric vehicles supply

Jan-15 DHL e Nissan Electric vehicles supply

Mar-15 Comune di Firenze e Renault EleCTra

Jun-15 Nissan e IVS Italia Vending made responsible

Jul-15 Citroen e Sibeg Green Mobility Project

Jul-15 Nissan e Apoteca Natura Partnership for sustainability

Oct-15 Comune di Palermo, Renault e Amat Demetra

Oct-15 Nissan e Regione Sardegna Project for GHG reduction

Oct-15 Deloitte e Alphabet Adoption of AlphaElectric

Dec-15 Nissan, Città di Bari e Aci Global Car sharing service

Dec-15 Nissan e Nestlè Zero impact mobility Figure 21. Projects considered in phase 2

In the phase 2 there are 16 projects selected.

An increase in the number of actors involved in these projects was registered with respect to the

previous phase even if the average remained amid two and three actors, mainly due to the higher

number of cases considered in this second phase.

The clients having private nature lose some of their predominance registered in the first phase for

the benefit of Public Administrations, which are mainly represented by municipalities and regions.

Approximately 50% of the cases under study, it is characterized by public clients underlying their

increasing interest toward electric mobility. This boost could be attributable to the rising pressure

put on the Public Administration to be environmental friendly having the role to be an example for

citizens and to sensitize the public opinion.

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The segmentation of the private clients appears more fragmented: among 8 of the selected projects,

just in two cases the client was represented by a company which was active in the transport sector,

while in the other cases the client coming from different sectors such as large-scale retail market,

restaurant, pharmaceutic, consulting and food industry. In these cases, the electric vehicles are used

mainly in activities such as last mileage deliveries or to ensure the mobility of employees.

Before a first phase in which the majority of the client was a company involved in the transport sector,

the data coming from the phase 2 demonstrated how the electric mobility started to attract

companies involved in different sectors; the choice of the adoption of electric vehicle in these cases

in mainly related to their willingness to be environmental sustainable in order to give a green image

to the company reducing the amount of GHG emitted.

Among the actors involved we have assisted to an increase of the utility, the main involved is Enel,

that inside of this types of projects represents the supplier of charging station. In this phase, the

supply of electric vehicles is often accompanied by the provision of charging stations which

represents an important element of the project. This evidence showed how the business models are

changing in these years and the projects do not contemplate just the supply of electric cars but also

the installation of charging stations at the same time.

4.3.3. Analysis of business model: Phase 3

The last phase of the analysis, phase 3, includes projects which were developed during the last year

on the Italian territory. The projects selected are 12 and the next table provides a list of them:

Date Main actors involved Object

Jan-16 Regione Emilia Romagna e Renault Mi muovo elettrico-Free carbon city

Jan-16 Exelentia Srl e CAS-Cogne Acciai Speciali Project Green Aosta

May-16 Nissan e Comune di Cagliari Electric vehicle supply

May-16 GLS Italy Think Green

Jul-16 Mercedes, Intesa S.Paolo e Electric Drive

Italia LUISS Green Mobility

Sep-16 Università di Roma Tre e Renault E-go Car Sharing

Sep-16 Gruppo Bollorè e Città di Torino Blue Torino

Oct-16 Poste Italiane e Nissan Delivery green

Nov-16 Repower Verde Dentro

Nov-16 Enel e Nissan e-go All inclusive

Nov-16 Carrefour e Share'ngo Car sharing

Dec-16 Coop Lombardia, Car Server e Nissan Project for development of e-mobility Figure 22. Projects considered in the phase 3

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In the last year, the private nature of the client was dominant and only in two cases of the analysed

cases, the project was request by a public entity. This evidence is mainly related to the empirical

origin of the data and not to a decrease in the interest toward electric mobility expressed by Public

Administration. The business diversification trend is confirmed by the different characteristics of

sectors involved as well as the dominance of the transport sector.

The general objective of these projects remained the creation of a car sharing service within the

jurisdiction of the Public authority that has launched the project or the awareness and desire of being

more sustainable in the cases of private clients.

It is interesting to point out that the role of EVs’ supplier is increasingly being undertaken by car rental

companies which had already involved in their fleet EVs, and not by the EVs’ producers themselves.

These projects have seen more and more the direct involvement of utility and companies’ provider

of charging stations: the aim is to give the client a turnkey solution which allows customers to have

both the supply of the electric vehicles that the charging columns with the included installation

available in a single package.

However, this new possibility to include in the project also the provision of charging stations, has

introduced an additional problem in this type of model.

If on one hand the installation of charge stations does not seem to a be a problem since in the market

there are many companies offering this kind of services, on the other hand the real problem is related

to the management of such charging stations. This evidence was mainly underlined by the public

client (region or municipality) which stated that it was difficult for them to find an entity which would

take care of the infrastructure management. In fact, being an activity whose reference product (the

charging station) is quite new and innovative, no firm is willing to undertake it because of companies’

scepticism about the profitability of such a business.

The business model has evolved primarily in this last phase of analysis; the focus of the projects is not

merely linked to the provision of electric cars but moreover a lot of services are connected to it. It is

also interesting to observe how the supply is beginning to turn to an audience composed not only by

private or public companies, but instead by individual customers. Enel and Nissan, in fact, have

recently developed a project called “e-go all inclusive” directly customized for the client which

enables to combine the supply of a Nissan Leaf with a box station in order to allow the client to charge

the vehicle at home, all offered in one package deal.

It is interesting to observe how the adoption of electric vehicles could represent an opportunity also

for companies’ internal mobility, such as in the case of “Cogne Acciai Speciali”, where the

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electrification concerns the internal park of company’s vehicles which are used within the plant and

factory.

4.3.4. Final considerations and results of the analyses

The temporal analysis of the projects allowed to point out the major differences between each phase

underlying how the business models toward the adoption of electric vehicles in private or public firms

have evolved over time.

After the analysis of each phase, it is possible to provide some final considerations about the general

evolution of the business models behind those projects. These considerations could allow to evaluate

the major sectors of interest and how the demand toward e-mobility evolved in the past, underlying

both the main drivers and barriers to adoption. In this way it will be possible to assess the importance

of the E-mobility given by companies and the way in which this paradigm could have an impact in the

Italian market.

Taking so a general perspective and considering the whole sample, the first remark that could be

done concerns the nature of the client.

Out of a total of 37 analysed projects, it can be stated that approximately 70% of the clients has a

private nature while the remaining part is attributable to Public Administrations. The private firms

involved in those projects were mainly medium and large-sized enterprises, which can more easily

overcome the obstacle to the adoption represented by the high purchase price.

Medium and large firms are characterized by a wider and more stable availability of financial

resources and moreover their businesses are more related to an idea and image that companies send

to their own stakeholders. In this way there is a slow wave approach to the electric mobility where

the trend is driven by large companies, but it is possible to appreciate how the smaller companies

are also approaching and starting them to move in accordance with this trend.

The corporate fleet market appeared as the most suitable one to pull the E-mobility in Italy. This

statement is also underlined by the data coming from Top Thousand, observatory on enterprise

mobility composed by fleet and mobility managers of large companies: 54% of the total electric

vehicles registrations occurred in 2016 is represented by corporate fleet with a market preference

for long-term rental contract, 86%. The corporate fleets are in continuous renewal, but just 1% of the

vehicles are electric. Among companies who decided to invest in the electric motion just 23% of the

cases has signed agreements with the energy utilities, 63% relies on the public charging infrastructure

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and 9% charge its vehicles thanks to PV plant installed in the company. The remaining 5% reckon on

charging stations installed in the company by the rental company.

According to Top Thousand, for what concerns charging electric vehicles issue, the obstacles to

overcome in order to have a diffusion of the E-mobility are first of all, the resolution of the problem

related to the battery life, which is identified as the main barrier by 35% of the fleet managers.

Secondly, the survey carried out among fleet managers indicates that 34% of the sample considers

necessary network expansion interventions while 14% looks at the availability of fast charging

solution as the one of the main problems. Finally 8% of the fleet managers assessed a reduction in

the rental tariff in order to make more attractive this type of solution.

Distinguishing private clients in their respective sectors of belonging and interest, the picture

referring to the sectors involved, appears quite fragmented as it possible to see from the graph

below.

Figure 23. Major sectors involved

The major sector which embraced the adoption of EVs is the transport sector, nearly 32% of the

projects, while the remaining projects have been developed in various different sectors, such as the

consulting, pharmaceutics and large-scale retail sector.

The common prerogative to all projects is the utilization of the electric cars in the last mileage and so

within the cities borders. This aspect makes far less significant the driving range of EVs which

represents one of the most important barrier to the adoption. The objective of the project affecting

the transport sector is mainly the creation of car sharing services and so the creation of new business

opportunity while in the other cases the main goal is to improve the image of the company according

to their green visions.

Public

Transport 32% Large-scale retail 8%

Restaurant 5%

Energy 5%

Consulting 3%

Metallurgy 3%

Pharmaceutic 3%

Postal services 3%

Food&Beverage 5%

Private

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The analysis and moreover the interviews with some of the service providers - referring to the

“contractor side” of the project - it was useful to discover the real goal of companies behind their

decisions to electrify totally or partially their fleet.

It was found out that the companies, whose business is related to the logistic (so we are mainly

referring to the transport and large-scale retail sector) are less likely to develop this kind of solution

and we could state that they are not driven by reasons about image and reputation, but the main

incentive towards the adoption of electric vehicles is given by the market itself. Indeed, as a company

involved in this kind of activity decides to change in favour of the electric mobility and starts to

operate providing this new service, also its competitors are forced to change their way of carrying

out activities otherwise they could risk to lose some clients that could decide to shift their suppliers

looking to a more sustainable and green company.

It could be said that such types of companies are the ones which are less likely to be “electric”, but

at the same time they are the ones that need it the most, confirming in part their main involvement

in these projects.

On the other hand, the driver towards the electrification of the fleet of the other private companies,

such as consulting or pharmaceutic companies, is mainly referred to their willingness to stay in line

with their companies’ mission and image. About these companies, usually characterized by a greater

level of innovativeness and curiosity, the aim for which they have developed such kind of projects is

not be addressed to economic reasons, but it is more related to an experimentation of the new

solution. Their innovative nature led companies to discover how this new solution could work and

bring benefits to businesses.

This difference in the kind of approach used by companies can also be seen looking at the way in

which companies react to the main electric vehicle barrier, that is to say the purchase price.

It is clearly evident that it is difficult for an enterprise to assess the economic return on electrification

investment. When companies decide to stipulate a contract with the car rental companies for the

provision of vehicles for their own fleet, they look at the cars’ rent as a benefit rather than a usage.

In order to sum up companies prefer to provide a fleet car, so a benefit, to their employees instead

of letting them use other solutions for their mobility such as a taxi.

For this reason, when they are considering the possibility to purchase an electric car instead of a

traditional ICE vehicle for their fleet, they want to be sure to have a return on the investment that is

at least equal to the price differential among the two solutions.

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The return on investment is difficult to state by companies and it is properly the difficulty to assess

such an aspect which mainly impacts on the goal of the project of electrification.

Companies belonging and familiar to the logistics will easier, since the high utilization rate of vehicles

for their activities and the possible cost savings due to the exemption from payment of ZTL and

restricted zone charges ease the perception and quantification of the return making it more tangible.

Firms, whose aim of the adoption of electric vehicles is mainly attributable to image issue, find it

more difficult to quantify and justify these investments and for this reason these kind of projects are

linked to an idea of experiment whose adoption is related to a long-term perspective.

Not only the purchase price, but – as it emerged from the researches - that the level of innovation

and complication tied to the technology represent a barrier for the clients.

Firms are scared by the limits that the electrification of the corporate fleet could provide to their

businesses and activities. Companies’ fleet managers want to be sure that the electrification will not

represent an obstacle for the company’s activities before presenting the project, because if they were

to promote such changing they must be assured that companies’ activities can continue to work as

before.

So considering a large scale retail company, they must be sure that notwithstanding the

electrification, the vehicles are always charged and able to go from a point A to a point B when it is

needed.

This element represents another important aspect we have to take in mind and which was probably

found as significant by some contractor companies, such as Alphabet, which provides a

comprehensive operational consultancy on the company that wants to electrify its fleet.

This consideration allows the client to have a comprehensive vision of the project which was already

totally planned both in terms of investments and in terms of reduction of GHG emissions, which can

be more important in case of adoption for vision and image purpose.

It is interesting to notice that this kind of offer is the result of a changing process which took place

along this year: the first projects were mainly related only to the provision of EVs and the number of

actors involved was usually low, one client and one contractor.

Year after year, business models have started to evolve and comprehend more actors in the projects.

In fact in this last phase, projects were not related to the mere supply of EVs but - within it the project

- a more complete service, which also included, for example, the installation and management of the

charging stations.

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Figure 24. AlphaElectric' service description

Even if collaborations between an automotive company and charging station operators are not so

widespread in our country, this trend toward a comprehensive solution is evident not only for what

concerns the B2B (Business to Business) market, but moreover referring to the B2C (Business to

Consumers) market: in the Italian market in 2016 it appeared, for the first time, an offer directly

pointed to the final customers from the partnership between Enel and Nissan. Thanks to the “e-go

all inclusive” solution the client will have a comprehensive solution that entails the supply of the EV

and the provision and installation of wall box for domestic charges.

4.4. Alphabet, a virtuous and innovative example

Alphabet, a company of BMW Group, is the leader in providing excellent services for enterprise

mobility. Alphabet has expanded and specialized in managing fleets of vehicles thanks to its know-

how, in fact it designs innovative and flexible solutions tailored to the needs of its customers, offering

a wide range of products and services including the consultancy and the long-term rental.

In 2013, Alphabet has launched “AlphaElectric”, a new brand totally dedicated to the electric mobility,

which earned in 2014 the “1° Premio Internazionale Le Fonti” as a company of excellence in the field

of electric mobility.

AlphaElectric is the first E-mobility solution which guarantees the integration of electric vehicles of

all brands in the corporate fleet in an easy and efficient way: the brand AlphaElectric is an entire

ecosystem of services, including electric vehicles, personalized consultancy and complete service

solutions with high added value.

It is a system that aims to promote the culture of “zero emission” and support concretely companies

offering a comprehensive operating consultancy to small, medium and large enterprises which want

to electrified their corporate fleet.

Such approach to the electric mobility is developed by the company in 4 steps:

1. Analysis of the electrification potential

2. Selection of vehicles

3. Charging solutions

4. E-mobility services

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The first step toward the electrification of the corporate fleet refers to the “Analysis of vehicle

electrification”. This analysis has the purpose to determine which are the traditional vehicles

belonging to the corporate fleet that could be “electrified” and so replaced with an EV. Such analysis

identifies and points out the number and type of vehicles which could be converted specifying and

distinguishing each single vehicle.

Indeed, thanks to analysis tools based on loggers, GPS detectors of vehicle’s position, collocated on

the vehicles, Alphabet is able to trace the path of each single vehicle and so determining how long

the vehicle is in motion, which distance it covered, its speed and how long the vehicle is being

stationing in park and where. In this way the usage of the client is analysed separately per each

vehicle.

This analysis ends up with a document which identifies, among all the analysed sample vehicles, the

once which could be electric, relying on the data collected during the period of the fleet’s analysis.

Thanks to this accurate and detailed analysis of the fleet, it is possible to rely on a model which

faithfully represents reality and this way the company is able to ensure that the introduction of EVs

in the fleet does not affect the normal course of client’s business activities.

After this first phase of identification of the number and type of vehicles that can be converted into

electrical, in the second phase, “selection of vehicles”, the customer’s need is analysed in terms of

“vehicle”. This means that, taking into account the data about the general vehicle’s usage, identifying

who, within the company is going to use the vehicle and for which purpose, among the overall EV

offer available on the market, it will be selected the EV that might better meet the customer’s needs.

For example, in the case of a manager, the proposal will be oriented to luxury cars, while in the case

the vehicle is going to be used for the last mileage delivery of products and goods, the proposal will

be focused on vans.

The objective of this phase is to offer the customers the most tailored solution which reflects the real

utilization of the vehicles every day. The only boundary is given by the customer, which could refuse

the proposal, and by the EV market, because, for example, at the moment an electric sedan at

affordable price is not present on the market.

The contract with the customer is a type of long-term rental characterized by a monthly fee which

depends on the company’s policy and includes all the costs associated to the vehicle: the rental cost,

maintenance cost and comprehensive insurance.

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In the third step, it is offered the charging infrastructure. Very often the client is not familiar with the

topic, he has no knowledge of the market and for this reason he is offered a consultancy to guide him

to choose the proper charging infrastructure solution tailored for his needs.

The analysis performed in the first phase enables to know exactly where, when and how many times

vehicles are stopped, establishing accurately the best positioning of the charging infrastructure. At

this stage it is not only fundamental the selection of the infrastructure placement, but it is equally

important to determine the type of structure and the best and most tailored solution.

Therefore, the choice will focus on the number of charging stations, their speed and mode charging

because different customers show different needs and requirements. In the case of an electric van

used for last mileage delivery, it will need to be in movement at any time and so it may need to

recharge very quickly in order to perform all its tasks within a day. Conversely in the case of EV used

mainly by employees, it has completely different characteristics of usage because the car will stop

and get parked much longer, giving the possibility to use different recharge station characterized by

low speed charge and consequently also by a lower amount of investment needed.

Finally, in the last step, are offered services that are strictly related to the car: as “E-mobility services”

including mobile App, driving courses and corporate car sharing.

The comprehensive proposal of Alphabet enables the customer to have a general but detailed

perspective on its corporate fleet and each step of the offer is tailored to its needs.

The introduction of electric vehicles in a corporate fleet is planned with an ad-hoc solution and it is

released a framework of comprehensive analysis where the investment measure is evaluated both in

terms of economic outlay and both in terms of environmental impact, by calculating the CO2 savings.

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5. CONCLUSIONS

This conclusive part of the thesis is dedicated to the exposition of final considerations and conclusions

about the Italian EV market potential. Relying on the data and analysis performed in the previous

sections, the aim of this part is to provide, firstly, a summary of the main aspects and features that

we have analysed in each section; secondly, thanks to these results which will point out the main

critical aspects, some possible solutions to boost the development of the E-mobility will be presented.

Thirdly, we will try to match data coming from the analysis of the supply with the results obtained

from the analysis of the demand, in order to try to forecast the future development and level of

implementation of the E-mobility in the Italian market. Hence predictions about E-mobility by 2020

will be provided, relying on our projections.

Finally, the possible repercussions on the electricity system will be analysed together with the

potential amount of CO2 emissions that the implementation of the E-mobility paradigm could save.

5.1. Summary of the main E-mobility aspects discovered

The previous analysis about the supply and demand for EVs allowed to discover significant aspects

about the future development of the E-mobility paradigm in Italy.

Starting from the critical aspects, the analysis pointed out that the purchase price, the driving range

and the availability of charging stations are the actual most important perceived barriers for the

diffusion of electric vehicles.

These aspects can justify the low development we have assisted during these years. Moreover, the

EVs’ offer is also strictly related to these evidences; it was possible to underline how the supply of

EVs till now has focused its forces on the provision of EVs’ models where these barriers could less

influence the customer demand. Hence the main orientation of automotive companies is to offer

small/medium size cars, whose usage can favour the development in some niche markets. This

strategy adopted by the automotive players seems to suggest that actually the Italian market is not

ready to embrace a big diffusion of EVs and it highlighted as a lot of work has to be done in order to

overcome these obstacles.

At the current state and if no measures and initiative will be taken in the future the paradigm of E-

mobility would not seem to have a lot of potential.

However, as it was also reported in the thesis, remarkable technological developments were made

and will continue in the future: in this sense the most important aspect to deal with concerns the

battery of the electric vehicle. Only when this component will be able to provide the electric car

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performances in line with those of traditional cars, we might witness an incremental growth of the

market. The continuous investment in R&D made by battery manufacturers and their partnerships

with automotive players has already provided good results, permitting to lower the purchase price

of EVs thanks also to the manufacturing process optimization and the ability to exploit economies of

scale.

If it is true that we can identify the manufacturing sector as a major driver toward the diffusion of the

E-mobility, it is also true that their efforts put in this field will not be able to drag alone the

development toward a more sustainable mobility.

The manufacturing sector thanks to its push could lower the barriers relating to EV itself lowering the

cost/benefit ratio of the product, but as the mobility is radically changing to a perspective which

considered it more a “service” rather than a product, also the availability of complementary goods is

crucial for a substantial development.

It is necessary that not only the utility of the EVs rise, but it is more important that the new technology

offers a higher total value with respect to the traditional vehicles if we want to overcome the actual

standard set by the ICE vehicles.

The lack in terms of complementary goods could describe and explain the reasons of a lower diffusion

of such a type of mobility in Italy with respect to the other European countries, such as Norway and

Netherlands. The difference currently lies in the availability of charging infrastructure and

complementary services and bonuses.

The main discriminant here is the involvement of the Public Authorities and Governments: the actions

needed by these entities entail a greater support in terms of provision of incentives but also it is

necessary to create an efficient and reliable charging infrastructure. The development of charging

infrastructure can be also supported by local utilities which represented a strategic role thanks to

their know-how and competences.

Only with a strong cooperation among all the players, from battery manufactures, automotive

producers to utilities and Public authorities, it will be possible to give a strong boost and determine

a straight trajectory toward a greener future.

In the next paragraph it will be provided a list of actions and initiatives that could be undertaken in

order to sustain the use and diffusion of zero emissions vehicles.

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5.2. Possible solutions to boost the E-mobility

The previous parts have enabled us to understand the main critical aspects which characterized the

electric mobility in Italy in the last five years. Referring to these results and on the impressions and

information coming from the market, this paragraph highlight the main actions and mechanisms that

local institutions would have to put in place in order to sustain the development of the E-mobility on

the territory.

The major contribution of this part coming from the “Piattaforma di Indirizzo strategico la mobilità

elettrica in Italia” also known as “Carta di Arese”, a document promoted and signed by Enel, Hera,

Class Onlus and A2A, who have joined together to request institutions the elimination of barriers that

constrain the development of sustainable mobility.

The elimination of the current barriers to the development of electric mobility in Italy can provide

moreover sensitive environmental, health and energy benefits contributing significantly to achieve

the objectives set at the international level in recent years and improve the liveability.

The interventions to be made in the short term and as long as the sector does not reach a proper

technological and commercial maturity can be summarized in the following macro-categories:

Economically facilitate the purchase of electric vehicles

It is necessary to introduce economic incentive instruments allowing to bring the purchase

cost of EVs with that of internal combustion counterparts. It is crucial not to make the same

mistake that was done in the past, when incentives, provided by Law 134 of 2012, have not

been enough to boost EVs market because the funding was aimed to the entire category of

vehicles with low CO2 emissions and due to this fact, the contribution was mainly used by

GPL and CNG vehicles. It is necessary to introduce mechanisms which must be exclusively

addressed to electric vehicles. Only in this way it is possible to sustain the growth of the

market and in this sense the solutions that can be taken into account may refer to:

Tax facilitation at the rate of 10% on the purchasing;

Economics contributions addressed to owners of an EV;

Fiscal detraction;

Super amortization for fleet focusing on deductions reserved for long-term rental

business, which at the current state represent about 50% of the overall EV market;

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In order to finance incentives, it could be constituted a mechanism based on a “bonus-malus” system

which penalizes the most polluting vehicles, as some European countries, such as Norway and

Netherlands, have already experienced.

Facilitate the creation of a charging infrastructure

As the charging infrastructure was discovered as one of the main problems affecting the

diffusion of electric vehicles, interventions are needed also in this field in such a way that the

realization of the charging infrastructure can occur in the short-term and in sustainable

manner.

The main interventions in this field refer to the creation of charging infrastructure on the

public land which is crucial in order to overcome the “range anxiety”, one of the first reasons

of distrust towards the electric mobility. The realization of this project could also enhance

the creation of an Italian industry whose purpose is the realization, installation and

maintenance of the charging systems and so boosting the country’s economy through the

provisions of new sources of businesses.

In particular the objectives in this area should focus on:

Solutions which allow the realization of the connection of the charging systems in

short time;

Establishment of special tariffs for those who use electricity for recharge the EV;

Establishment of guidelines for recovery housing and for technological adaptation of

new and old buildings;

Establish synergies and coordination for the construction of infrastructure

It is important to start from the predispositions set by the PNIRE, “Piano Nazionale

Infrastrutturale per la Ricarica dei veicoli alimentati ad energia Elettrica” in order to have a

harmonious development of the network throughout the country.

The creation of the charging infrastructure has to come off in a more consistent and efficient

manner as possible on the territory and so for this reason the definition of internal rules is

necessary to prevent a “wild” infrastructure whose characteristics do not reflect the real

needs.

About that it would be appropriate to provide program agreements on local areas at regional

level or aggregations of multiple municipalities, even with the intervention of ANCI

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(Associazione Nazionale Comuni Nazionali), in order to ensure a more homogenous spatial

planning of the charging infrastructure and an adequate and optimal coverage of all the

municipalities.

Establish rules and regulations to address the main open points of the industry

As we have already pointed out and discussed, several critical issues are still open in the

electric mobility that need to be managed at the regulatory level. Among the main issues

underlined regard the following aspects:

Parking management at the charging stations with the objective to prevent the

phenomenon of “wild stop” that is more frequent in the urban centre. The areas

reserved for vehicle recharging need to be “free” in order to guarantee the

availability and continuity of the service and about this purpose are suggested

mechanism basing on time billing and the changing of the road signs that identifies

uniquely the space reserved for EVs;

Establish a uniform administrative procedure for the installation of charging

infrastructure throughout the entire national territory;

Develop the bidirectional exchange between the vehicle and the network, the so-

called “Vehicle to Grid” (VTG). This technology aims to exploit EVs and their batteries

as reserves at the service of urban network in cases of peak demand and moreover

it can be used to support networks that rely on non-programmable renewable

sources, taking over with the return of electricity already absorbed by the battery. A

system of rules and remuneration is mandatory if we want to applicate and exploit

this technology;

Retreat, reuse and disposal of batteries present on EVs at the end of their useful life.

This can be an important ambit of growth for the country and so it is important to

sustain the R&D activities aimed to find innovative mechanisms in order to give a

second life to the dead batteries or to recover strategical components which could

be reused in new processes. These activities could also help to reduce the electric

vehicles’ TCO lowering the gap with the ICE vehicles.

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5.3. Possible scenario by 2020

In this part we will try to forecast the future trend of electric vehicles sales in the Italian market.

In 2016 the total number of EVs sold in the World was equal to 800.000 units, registering a growth

about 40% compared to the previous year. Despite this huge growth at a global level, in Italy during

the same year just 2.821 EVs were sold, equal to 0,1% of the entire automotive market, and so no

growth was recorded over 2015.

In Italy at the end of 2016 the number of EVs circulating in the country was equal to around 8.000

units stressing that the electric mobility is still considered a niche market in Italy.

As it was possible to see from the previous analysis, Italy nowadays presents a low of diffusion of the

electric vehicles compared to the other countries and such a comparison somehow pointed out the

reasons of this huge gap.

The low amount of EVs’ models available and the high barriers perceived by customers are the main

reasons of such a “failure”. However, it was possible to see as both the supply and the demand of

EVs is going to change in the next future.

On the one hand thanks to the strong efforts put in R&D activities to improve the performances of

the vehicles and to the emergence of new partnerships between different actors (automotive

companies, battery manufacturers, utilities…), we will be able to assist at a growth of the EVs offer;

on the other hand, we can also observe how the consumers demand is characterized by an increasing

interest toward the environmental issue and so toward a more sustainable mobility going to

potentially increase the demand side.

It should be also considered the correlation among these two sides and we must evaluate them

together because each aspect of the supply side could have an impact on an aspect related to the

demand side and vice versa.

For example, the new investment in R&D and in the manufacturing processes made by battery

manufacturers will enable them to make more efficient the production processes and to exploit the

economies of scale, reducing the unit cost of the battery. This fact will have a positive effect on the

automotive operators which will be able to offer EVs at a lower purchase price and also to produce

new EVs models, due to the increase of competences and technologies. Moreover, it will boost the

supply of the electric vehicles on the market but also it will have a positive impact on the demand

side, whose barriers can be overcome.

A reduction of the purchase price will make more affordable and interesting the EVs for costumers

reducing the gap with ICE vehicles; moreover, thanks to the provision of new innovative models and

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the enlargement of the offer, customers will have more opportunities such as the selection of the EV

which is more suitable for their needs.

Hence it is evident the need to take into account both aspects in order to consider also the significant

correlation among the two sides and so try to assess the “real” future development of EVs.

Moreover, the development plans launched by the Government in the recent period for what

concern the realization of an efficient and capillary charging infrastructure, it is also an aspect which

we should keep in mind since it is going to strongly affect and sustain the future development of the

market. If the plans set by the Government will be carried out and put into practice, they will generate

a significant impact on the diffusion of the EVs.

Hence only taking a fully integrate perspective which embraces all this kind of aspects and actors

considering all the various relationship amid these factors, we will be able to assess the future of the

E-mobility in Italy.

Starting from this statement and keeping it in mind, we can concentrate on more analytical data and

try to assess the EVs impact in the future describing it with numbers.

Thanks to the analysis performed before, to the researches about the market and to the opinions of

the operators gathered through interviews, it is possible to assess that from the beginning of 2017

until the end of 2020 approximately 70.000 EVs will be registered in Italy.

The EVs will represent the 0,3% of the automotive market share in 2017, registering an increase of

300% if compared to the current situation, and they will represent approximately 2% of the annual

vehicles registrations in 2020.

This means that the number of EVs that is going to be registered during 2017 will be approximately

equal to 14.000 units. The expected evolution of the electric vehicles registrations in the Italian

market from 2016 up to 2020 is represented in the following graph:

Figure 25. Expected EVs sales by 2020

8.00014.000

25.000

43.000

78.000

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

2016 2017 2018 2019 2020

EVs

circ

ula

tin

g

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As it can be seen from the graph, in the near future we will witness a considerable boost of the Italian

EVs market. We will record an annual average increase of about 75%; the increasing trend of the

number of registrations compared to the previous year, highlighted by the fact that we will note the

biggest increase amid last two years.

The number of EVs between 2019 and 2020 will get an increase of more than 80%; it is properly 2020

the period in which we should have the best market condition; the EVs is estimated at 54 models

thanks to the lowest predicted level of the battery’s cost and these numbers could be also better if

all the measures and mechanism will be put in place by each different actor involved in the industry.

We will soon be able to understand if our predictions are right or wrong since 2020 is just three years

from now. In order to ensure that Italy will abandon its position at the bottom of the barrel and

reduce the gap with the main European countries, it is important and crucial that all the parts bring

out their duties participating in an active and consistent way to this transition toward a more

sustainable and electric mobility.

The time to act is now and it is not possible to wait longer if our Country want to play an important

role and make its contribution toward a greener mobility worldwide.

5.4. Expected impact on the National electricity system

An issue that might be interesting in order to deepen the matter, concerns the integration of the E-

mobility inside the National electricity system.

In order to evaluate the increase of the electricity required by the electricity system related to the

development of the EVs, we started hypothesizing a future scenario in 2020 characterized by 70.000

EVs, as it was forecast in the previous paragraph.

Moreover, the future electricity demand related to the diffusion of EVs will be influenced by the

repartition amid BEV and PHEV. Indeed, these two solutions differ from each other mainly in terms

of amount of electricity required for their functioning; if we consider the same mileage for both types

of EV, the BEV, whose propulsion relies just on the energy produced by its electric motor, will need a

higher amount of energy if compared to PHEV in order to cover the same distance.

In 2020 we estimated an electric vehicle fleet composed of 70% by BEV. The future improvement of

vehicles’ performances will enable BEV to lower the gap with their hybrid counterpart in this way

becoming more attractive since the main discriminant now is represented by the driving range.

Moreover, this estimation is in line with the industrial development plans of the automotive

companies which underline their willingness to focus on this type of solution for the next future.

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Apart from this aspect, the other parameters which were considered in the analysis are reported in

the table below:

Table 7. Hypothesis considered for both BEV and PHEV

BEV PHEV

Annual mileage [km] 15.000 15.000

Electricity consumption [kWh/100km]

13,7 13,7

Utility factor [%] 0,68 -

Market share 70% 30%

For both types of EVs, it was esteemed an annual mileage equal to 15.000 km. However, even if it

was assumed the same annual mileage for both types of EVs, we introduced an additional factor

concerning PHEV, which enables us to consider the distance travelled using only electrical energy

without using the electric motor. This factor is called utility factor and its value was taken from the

EPRI study report. The values related to the electricity consumption of vehicles were obtained from

a study developed by the Ministry of Economic Development in accordance with Ministry of

Environment and Protection of Land and Sea and the Ministry of Infrastructure and Transport.

It was calculated a unique value making the average among the previous two ones and then the result

was corrected, simulating a reduction of the specific consumption of vehicles about 1% per year,

assuming that the continuous technological progress in the field of batteries will lead to an increase

in the energy and thus to a reduction of the vehicle’s weight.

Once all the parameters have been defined, it was possible to calculate the amount of electricity

demand by the expected EVs’ fleet in 2020.

The total electricity demand will be equal to nearly 130.000 Gwh/year, corresponding to

approximately 137.840 Gwh/year if we consider also the network losses (AEEGSI, 2016).

The increase of the demand of electricity which derives from a boost of EVs registrations represent

an increase well below 1% if compared to the data about the electricity demand registered in 2016.

For this reason, we can say that the future diffusion of the electric mobility, given our assumptions,

should not present any critical issue about this aspect.

Indeed, it may be more complex to assess the impact that the E-mobility paradigm could have on the

predictability of the loads, due to the non-programmability of energy withdrawals from the user to

load the vehicles.

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Anyhow, even this aspect should not represent a critical issue as it was shown by a study conducted

by RSE. In this study, relying on the data provided by ISTAT about the number of houses having a

private parking space and its correlation with the distribution of these houses/parking space, of the

EVs and with the penetration rate of electric cars in the parking spaces available, it was stated that

the major part of the electricity demand for charging the electric vehicles will be allocated during the

night hours.

It can be reasonably expected that the majority of the EVs’ owners will have a parking space where

they can charge their vehicles once coming back from work in the evening and so concentrating the

peak of demand during the evening and night hours.

Based on such assumptions, the study performed an analysis showing the impact of charging profiles

on the electricity demand during a generic day of spring (so characterized by a low charge). Such an

impact was even evaluated assuming two scenarios; one in which the presence of a smart control

system of the charging infrastructure is able to pave the night-peak demand (Scenario 1), and another

in which the charging is concentrating in the evening and in the first night’s hours.

Figure 26. Simulation of EVs' electricity demand on a daily charging profile

In the graph for both scenarios two cases are shown: one in which no diffusion of EV is expected and

the other one the contrary.

It is possible to observe how also the predictability of the charges should not represent a problem in

the future and so we can conclude that the electricity system will not face a negative impact.

In the case in which some problems could emerge it is necessary to find out some ways to solve them;

the main solution related to the possible criticality, arises from the programmability of the charges is

represented by the “Vehicle to grid” technology. This technology enables to use the EV such as a

“mobile power plant”, able to accumulate and reinject into the gird the unused energy. Thanks to

this technology, the EVs will be able to offer a network balancing service in exchange of a

remuneration. In Italy this kind of technology has not been implemented yet but the AEEGSI is

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working to find the right system of rules and remuneration, which could lead to its diffusion in the

next future.

5.5. Expected impact on CO2 emissions levels

In this last part, it was considered the possible impact on the level of CO2 emissions that the diffusion

of the electric mobility could have in our country. The EVs, thanks to their lower amount of g of CO2

emitted per kilometre, are expected to drag the country toward a better quality of the air and

liveability especially in the urban centre.

In order to esteem the impact, it was conducted a comparative analysis between the amount of CO2

emissions that we are expected to register if our predictions about the diffusion of the E-mobility will

be confirmed and the emissions that would occur in a future “traditional” scenario, where the

emissions will exclusively refer to the circulation of an equal number of ICE vehicles.

The scenario characterized by the E-mobility paradigm considers both the emissions related to

circulation of vehicles and the emissions generated in the electricity production processes. As the

amount of CO2 generated emissions depends on the type of sources used in the electricity production

process, it was considered in the calculation the average national value in 2016 provided by ISPRA.

The analysis was developed recalling part of the hypothesis shown in the table 7 and moreover we

need to introduce some hypothesis related to the amount of emissions emitted for each type of

vehicles. The assumptions made for each scenario about the amount of CO2 emissions are reported

in the following tables:

Table 8. E-mobility scenario's features

E-mobility scenario

Amount of emissions (BEV) -

Amount of emissions (PHEV) 50 g CO2/km

Amount of emissions per kWh produced 337,1 g CO2/kWh

Table 9. Traditional scenario's features

Traditional scenario

Amount of emissions (ICE) 125 g CO2/km

The data referred to the amount of emissions for PHEV was estimated, by averaging the values of

emissions related to the actual existing PHEV models on the market. Then it was lowered by a few

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percentage in order to replicate the effect that technology investments will bring in the future. The

same reasoning has been held in the case of ICE vehicles.

The results related to the two different scenarios are shown in the next graph:

Figure 27. Expected emissions in the two different scenarios

The development of the E-mobility scenario should allow to obtain significant benefits in terms of

CO2 emissions. The occurrence of this scenario, according to the previous hypothesis, will cause the

annual emission of nearly 51.000 tons of CO2.

In the case of the traditional scenario, the annual amount of emissions in the atmosphere will be

equal to approximately 131.000 tons of CO2. The diffusion of 70.000 EVs in 2020 instead as many ICE

vehicles in the traditional scenario, will provide a drop about 60% in the level of emissions.

77

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