Monday, November 25, 2024

Of Nudges and Sledgehammers

Governments cannot solely accelerate the adoption of technology, such as electric vehicles, by simply providing incentives and regulations. A more nuanced approach is required to address the specific pain points of the early and late majority. 

Moore and Thaler & Sunstein

Moore - Visionaries, Innovators, Early and Late Majorities

Moore identifies Innovators: A small group of tech enthusiasts who embrace new technologies early on, Early Adopters - visionaries who seek out innovative solutions to solve problems and the early majority - pragmatic customers who adopt new technologies once they are proven and reliable. The chasm or crack (p.25) separates the early adopters from the Early Majority, with the implication that specific strategies need to be employed, or the new technology will fail because it will never reach the Early and Late Majority.

Government Scaffolding

Can a government accelerate the adoption of technology, creating the necessary scaffolding to traverse Geoffrey Moore’s “Chasm”? [Moore, Geoffrey A., Crossing the Chasm. 3rd Edition, 2014.] In the case of Electric Vehicles, I think the argument is falling towards, “no”.

It is clear to see that governments can, and have, applied financial incentives, subsidies, have attempted to define regulatory support and standardization, and have launched public awareness campaigns and education initiatives. Government mandates on vehicle manufacturers attempt address the supply side of the innovation.

These tactics do not address Moore’s suggested solutions to cross the chasm. One specific strategy is to build a strong value proposition to address the specific needs and pain points of the target market. How does an Electric Vehicle address the pain points for the early and late majority without introducing new, immediate pain points?

Immediate Pain Points - Math is Hard

My wife and I were considering an all-electric EV (the Honda Prologue) when a pain point emerged. A round trip from Austin to Houston is about 330 miles. The Prologue gets an estimated 300 miles on a single charge - requiring a charge prior to the return leg of the trip.

My current SUV achieves 425 miles without the mental gymnastics of EV mathematics: percentage charged, weather, number of passengers, terrain, or driving style. How much time should be set aside for a recharge in Houston – (more math, somewhat complex), how much will it cost, and will there be a Starbucks nearby for a coffee during the recharge?

Internal Combustion Engine (ICE) calculation:

Seventeen gallons * $3.25 per gallon, about $55 and 15 minutes - including time to stretch and grab a snack. You probably did the math in your head without breaking a sweat.

Range Anxiety > Global Climate Change

The likely answer to the question of government scaffolding is “not yet”. But the real solution will come from several years of pain for the automobile manufacturers – trapped by mandate and falling (being pushed?) directly into the chasm. “Range anxiety” is a tough challenge in Texas, requiring technical solutions to charging and super-charging infrastructure, and battery improvements.

Of Nudges and Sledgehammers

Oddly, the balance of “liberal paternalism” as described by Thaler and Sunstein in “Nudge” [Thaler, Richard H., and Sunstein, Cass R., Nudge, The Final Edition, 2021] has been sorely forgotten. The early and late majority can make better decisions for themselves and society, but you cannot Nudge using a Sledgehammer. Electric vehicle adoption may eventually cross the chasm, but the solutions will not come from the government.

Our family will stay with internal combustion for now.

What do you think, can the government create scaffolding to accelerate EV adoption?