Would You Like to Own an All-Electric Car?
77% of Americans are open to learning more about how to live more sustainably (Ellsmoor, 2019). Apart from government policies, there are other factors that motivate people to buy electric cars. This paper argues that the demographics that are likely to buy all-electric cars include young adults and environment and cost-conscious people.
All-electric cars only appeal to certain demographics. According to General Electric (n. d.), three groups of people are likely to buy electric cars, and they include environmentally conscious, frugal travelers, and tech-savvy drivers. These factors represent the motivations for buying an electric car. For instance, environmentally conscious people feel that all-electric cars reduce the rate of emission from fossil fuels, which have a higher potential for polluting the atmosphere. For instance, Elisabeth Sakkestad, who owns an electric car, says that it feels better when a person is driving an electric vehicle as opposed to a fossil-fueled one (Savage, 2020). Most of Americans are environment conscious. Ellsmoor (2019) says that more than two-thirds of Americans are concerned about how their actions affect the environment. As such, promotion strategies for all-electric cars should focus on the market niche availed by the high level of environmental consciousness in America.
Price is one of the four components of the marketing mix. On this note, frugal travelers think that all-electric cars are cheap to maintain and fuel. As such, these people are motivated by the thought of the amount of money they will save if they are to drive in an all-electric car as opposed to the positive effects these vehicles have on the environment in terms of reducing pollution. Apart from being frugal, some cost-conscious individuals turn to electric cars in order to benefit from financial incentives from the government. The biggest motivator for purchasing electric cars is the federal and state incentives (Smart Energy International, 2019). Incentives have helped Norway attain a high level of electric car ownership. The Norwegian government offers tax incentives to people buying all-electric cars, including tax exemptions, parking rates, and standard toll (Savage, 2020). As such, although environment conscious people are likely to buy electric cars, the costs of these vehicles remain a major hindrance.
At the same time, young adults are also a target market for all-electric cars. As compared to their older counterparts, young people are more environmentally conscious (Butler, 2019). A recent study performed by a campaign dubbed Drive Change Drive Electric, more than 50% of the participated stated that they want to purchase electric cars but the number increased to 63% when one factor in the millennials and drops to 38% when baby boomers are included (Smart Energy International, 2019). Evidently, there are enough people interested in all-electric cars meaning that there is a possibility that one can sell these vehicles profitably.
However, the price of all-electric cars is out of reach for many young adults. As a result, people aged between 25 and 34 years old account for only 10% of all-electric vehicle purchases, according to a survey by Cox Automotive (Butler, 2019). Over the years, the prices of electric vehicles have been decreasing rapidly. This phenomenon can be attributed to the recent decrease in the cost of batteries used by electric cars. For instance, the costs of batteries used by electric cars plummeted by 70% between 2010 and 2016 (Butler, 2019). With the anticipated decrease in the price of all-electric cars, the market share for these vehicles is expected to continue increasing. In Norway, the supply for electric cars is higher than the supply. As a result, consumers are forced to wait in line for an opportunity to own an electric car. For instance, Daniel Milford Flathagen from Trondheim had to wait for 18 months to own a Hyundai Kona Electric (Savage, 2020). Evidently, marketers should study why all-electric cars are in demand in Norway.
In conclusion, more people are interested in doing their part in saving the environment from pollution. Environmental conscious individuals are the target markets for all-electric cars. At the same time, marketing strategies for all-electric cars should focus on sensitizing customers about the incentives available for individuals buying these kinds of vehicles.
References
Butler, C. (2019). Electric vehicle prices finally in reach of millennial, Gen z car buyers. Retrieved from https://www.cnbc.com/2019/10/20/electric-car-prices-finally-in-reach-of-millennial-gen-z-buyers.html
Ellsmoor, J. (2019). 77% of people want to learn how to live more sustainably. Retrieved from https://www.forbes.com/sites/jamesellsmoor/2019/07/23/77-of-people-want-to-learn-how-to-live-more-sustainably/#6a050c892b01
General Electric. (n. d.). GE surveys uncovers who is most likely to buy an electric vehicle. Retrieved from https://www.reliableplant.com/Read/27820/GE-most-like-buy-EV
Savage, M. (2020). How Norway convinced nearly half of their drivers to switch to electric cars. Retrieved from https://www.sciencealert.com/how-norway-convinced-people-to-switch-to-electric-cars
Smart Energy International. (2019). New study reveals interesting statistics on EV ownership and consumer interest. Retrieved from https://www.smart-energy.com/industry-sectors/smart-energy/new-study-reveals-interesting-statistics-on-ev-ownership-and-consumer-interest/