With a government pledge to end the sale of all new conventional petrol and diesel cars by 2040 the future for Electric Vehicles (EVs) looks bright. Supply is undeniable, but is there a demand to match it? Even with optimism for EVs at an all-time-high what are the real purchase drivers of the changing nature of the EV market and what should manufacturers be looking to create from their brand image?
The electric car ecosystem
More and more automotive consumers are raising their concerns over green issues such as rising CO2 emissions, but there is a reluctance from British drivers to embrace cleaner electric technology and so the change towards a low carbon future is slow.
With less than a 1% share of current car sales, electric vehicles are struggling to break through. There has been a marked decline in hybrid sales since the subsidies for plug-in hybrids was removed and the grants for fully electric cars reduced from £4.5k to £3.5k.
“There is a reluctance from British drivers to embrace cleaner electric technology and so the change towards a low carbon future is slow.”
Findings from the most recent Transport Research Laboratory are pretty disparaging for example a side by side comparison of an e-Golf (the hybrid Golf GTe) and a petrol Golf GT, saw consumers voice their concerns and barriers to purchase for the electric version.
Not surprisingly the key barriers are the driving range between charging points, cost and charging infrastructure. But what does this mean for manufacturers and policymakers?
The evidence suggests that a minimal range for driving of at least 320km (50% consideration) with the ability to conduct the majority of journeys at 480km are essential aspects (90% consideration).
In addition, 85% of those questioned said price was “very” or “extremely” important with over 70% expecting the government or the motor industry to subsidise purchase in the next five years.
Driving in the slow lane
Whether it’s BMW i8, Tesla or I-Pace Jaguar (higher priced EVs) customers are making a statement about the performance of these vs petrol cars as well as their green credentials. The technology to outperform most petrol cars and yet “save the planet” is compelling with lower emissions. What we see when we look at the interests and motivations of this set of customers is that they are far less concerned with the costs of the electric car and more interested in how it performs, the prestige it offers and its innovative technology.
Cost may not be an issue for this customer segment but it is for the majority of consumers which reveals the need for EV manufacturers to segment their wider customer base further and take into consideration the perceived barrier of cost as well as the lack of EV technology knowledge.
The road ahead
We know that the government has pledged to end the sale of all new conventional petrol and diesel cars by 2040 and despite pessimistic articles, views and theories – the future is electric.
According to Baringa Partners, optimism for electric cars is at an all-time high with 30% of Britons considering buying an electric and 40% believing that in EVs will be more popular in the next 15 years.
Most people still don’t think about electric vehicles when they are buying a new car so there is a need to develop a strategy to build a recognisable EV brand.
But the barriers are still there for consumers and automotive brands alike. According to Google Trends, range (26%), price (24%) and infrastructure (22%) are all part of the alleged concerns for consumers and some of the most searched questions about Electric cars (“Are electric cars automatic or manual?”, “Electric cars with the longest range?”, “How far can electric cars go?”) reveal that we have a steep learning curve when it comes to EVs. Like any other new technology, consumers don’t have the full story and that creates the gap between interest and action.
On the other hand, some of the biggest challenges for electric car manufacturers is to identify whether their customers associate their brand with EVs. Most people still don’t think about electric vehicles when they are buying a new car so there is a need to develop a strategy to build a recognisable EV brand and shift people’s mindsets to increase their appeal in the eyes of the consumer. As with so many other products, when consumers start seeing more of them around, it will act as a social contagion and result in the increase in electric car purchases.
Starcount’s data science team is currently working with automotive brands to help them identify their customer’s motivations for purchasing an electric vehicle. Our studies revealed that part of solving the challenge of transforming the market will depend on the ability of car manufacturers to understand in depth, consumers perception and what motivates them to go electric. This can be achieved by harnessing their data and overlaying it with our motivational segmentations to make evidence-based decisions and tailor their customer communications to achieve greater engagement and subsequently sales.
In the main, consumers may not consider buying an electric car now but it is certain that they will be in the near future with EV sales forecast to cross the 25 million mark by 2025, so the future is bright (and electric). Comprehensive manufacturer buy-in supported by government regulations, electric car technology rapidly improving and infrastructure that makes using one easier will all help drive sales and increase advocacy.
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