Collaborative Innovation for Sustainable Fleet Operations: The Electric Vehicle Adoption Decision

35 Pages Posted: 25 Mar 2011 Last revised: 25 Jun 2014

See all articles by Vanessa Chocteau

Vanessa Chocteau

affiliation not provided to SSRN

David Drake

University of Colorado at Boulder - Leeds School of Business

Paul R. Kleindorfer

University of Pennsylvania - Operations & Information Management Department; Paul Dubrule Professor of Sustainable Development & Distinguished Research Professor at INSEAD

Renato Orsato

INSEAD

Alain Roset

La Poste

Date Written: April 26, 2011

Abstract

We study the impact of collaboration on the adoption of electric vehicles (EVs) among commercial fleets. Using cooperative game theory, we characterize the joint payoffs for the primary stakeholders in the EV adoption decision - the fleet manager, auto manufacturer, and electricity supplier - to determine the conditions under which EVs become economically feasible for commercial eets. We do so in two settings. We first analyze a scenario where all three stakeholders cooperate in the EV adoption decision, a setting pertinent in regions such as France where a national electricity supplier makes such an arrangement feasible. We next analyze a scenario where the fleet manager and auto manufacturer cooperate but the electricity supplier participates as an independent actor, a setting pertinent in regions such as the United States where no single electricity supplier possesses sufficient market scope to become involved in the EV decision on a national scale. We show that convex per unit EV production costs drive a boundary solution for both the two- and three-party coalition EV adoption decision. We also illustrate the impact of carbon and operating cost advantages of EVs relative to internal combustion vehicles on the adoption of EVs and complementary vehicle-to-grid technology. Comparing the regions of EV adoption within the two coalition settings provides insights into the value of the electricity supplier's cooperation and the conditions under which intermediation to promote such cooperation can add value.

Keywords: Fleet Management, Carbon Regulation, Sustainable Operations, Collaborative Innovation

Suggested Citation

Chocteau, Vanessa and Drake, David and Kleindorfer, Paul R. and Orsato, Renato and Roset, Alain, Collaborative Innovation for Sustainable Fleet Operations: The Electric Vehicle Adoption Decision (April 26, 2011). INSEAD Working Paper No. 2011/52/TOM/INSEAD Social Innovation Centre. Available at SSRN: https://ssrn.com/abstract=1791623 or http://dx.doi.org/10.2139/ssrn.1791623

Vanessa Chocteau

affiliation not provided to SSRN ( email )

David Drake (Contact Author)

University of Colorado at Boulder - Leeds School of Business ( email )

Boulder, CO 80309-0419
United States

Paul R. Kleindorfer

University of Pennsylvania - Operations & Information Management Department ( email )

Philadelphia, PA 19104
United States

Paul Dubrule Professor of Sustainable Development & Distinguished Research Professor at INSEAD

Boulevard de Constance
77305 Fontainebleau Cedex
France

Renato Orsato

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Alain Roset

La Poste ( email )

France

HOME PAGE: http://www.laposte.fr

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