Saturday, July 24, 2010

Affluent Likely To Lead Charge For Electric Vehicles

From chron.com

Affluent likely to lead charge for electric vehicles

By ANDY STEINHUBL and JORGE LEIS
HOUSTON CHRONICLE
July 24, 2010, 4:01PM

Suddenly, America's shift to electric vehicles is in top gear. A recent Senate bill proposes switching half of America's cars and trucks to electric power by 2030. Cities across the U.S. are actively promoting the adoption of electric vehicles. Even the hometown of big oil and gas is aggressively chasing a new title: the nation's electric-car capital. Houston created a fleet of electric-powered vehicles and partnered with Nissan and Reliant Energy to establish a network of electric charging stations. But while federal, state and city governments push the new technology, the question now is: How many U.S. drivers truly want to drive electric vehicles? And, what exactly are these customers looking for?

The first question is a challenge due to the higher cost of electric vehicles, which depend on batteries that are still expensive. Bain & Company's customer research shows that if the total cost of electric vehicles (vehicle price plus fuel and maintenance charges) is comparable with conventional cars, current global sales of electric vehicles would be as much as 1.5 million units annually — with more than 500,000 units sold in the United States.

Figuring out who will buy electric cars now - when there's still a cost disadvantage - is complex. According to Bain's recent market research, potential demand for electric vehicles will come from four distinct customer segments with varying degrees of interest. These are: the eco-friendly "green innovators;" the budget-conscious "cost-shoppers;" the risk-averse "laggards;" and finally the eco-prestige, high-end customers. We call this last influential group "Premium 2.0," because the needs and the purchase preferences of these demanding electric-vehicle customers will redefine the high-end auto market.

Our research shows that in the U.S., it's the up-market Premium 2.0 customers who will lead the adoption of the new technology. This group is willing to put up with technology glitches, a low vehicle range and other performance issues as long as they are the first to drive the innovative and cool new electric cars. In fact, Bain's research has identified a potential market of about 350,000 such premium customers worldwide - up to half of them in the U.S. - who would be ready to buy an electric vehicle today, even if it's priced at about $12,000 above a comparable conventional car.

That brings us to the sell side. The emergence of the Premium 2.0 shopper as the first sizeable customer segment - as opposed to green innovators - will have huge implications for how car manufacturers design, market and package electric cars in the United States. Just as iPhone customers pride themselves on being distinct from other mobile-phone users, these prestige customers seek cachet for the extra cash they're willing to spend for the first generation of electric cars.

The nascent market for electric vehicles could be a disruptive force that challenges the dominance of leading car makers. Potential Premium 2.0 customers in the U.S. currently drive a mix of conventional premium German, U.S. and Japanese brands. When asked which car manufacturer they would buy an electric vehicle from, many listed both Japanese and German brands, with U.S. brands trailing behind.

While Premium 2.0 customers will lead the charge for electric vehicles, other consumers will soon follow. According to Bain analysis, as usage and volumes increase and technology improves, battery prices could fall by 60 percent by 2020. That would further accelerate consumers towards a new energy future - one that relies less on oil and generates fewer carbon emissions. With Texas increasingly generating power from renewable wind energy and Houston steadily installing charging infrastructure, the future for electric vehicles, at least in this corner of the U.S., seems bright.

2 comments:

Diianna said...

Thank You. I say the same :)

Hybrid said...

Thanks. Appreciate the visit.

Post a Comment