12
Dec

Autonomy, Delayed: Four Reasons Why Millennials May Not Be Ready For Self-Driving Cars

An Autonomous Future Series: For automobile manufacturers, suppliers, and technology companies, a bold new future has arrived. Technology that adds autonomous features to the driving experience are now available on vehicles by all major manufacturers – inching us ever closer to the day where the driver is a passive, rather than active, participant in the driving experience. To take a closer look at what’s to come, automotive research experts from Market Strategies-Morpace will share their insights in an occasional blog series titled “An Autonomous Future.” In this blog, Dania Rich-Spencer and Stephan Schroeder, Automotive Vice Presidents at Market Strategies-Morpace, share insights about why a consumer panel of millennials do not trust self-driving vehicles and, therefore, would not step foot inside one.

By: Dania Rich-Spencer & Stephan Schroeder – Vice Presidents, Automotive Growth & Innovation

 

To say that autonomous vehicle technology is top of mind for auto manufacturers is a slight understatement.

Across the globe, carmakers are doubling and tripling down on features that will take the power of the driving experience out of the often-unpredictable hands of the car owner, and into the relative algorithmic safety of computer-driven vehicular tech. According to a Brookings Institute study, manufacturers spent more than $80 billion on engineering AV technologies for their cars in 2017. In fact, a majority of this year’s models have incorporated one or more autonomous features — things like lane departure warnings, automated braking, and radar-enabled cruise control.

Framed against this reality, it would be easy to expect that a hands-off future is all but assured. In fact, at the recent ADAS & Autonomous Vehicle USA Conference, engineers spent two days talking about continued refinements that will assure the public’s safety. During one session, in fact, engineers discussed with pride spending considerable resources to understand how many times a pedestrian looks before entering a crosswalk.

So it was surprising — indeed, shocking — to observe these same engineers shift in their seats during a consumer panel discussion facilitated by Suzanne Miller of Morpace on Day 2. During the discussion, five millennials — without hesitating — answered “No” to the most fundamental of questions: “Would you step foot inside an autonomous vehicle?

Though the response was for some a harsh reminder of the consumer challenges that still have to be solved, the question of trust is not a new one — in fact, a poll released earlier this year by the American Automobile Association found that 73 percent of those surveyed are “too afraid” to enter a self-driving car. This is up 10 percentage points from the year prior, and underscores the biggest hurdle facing AV and ADAS tech — one that cannot simply be funded or engineered away.

As we listened to the panelists — varying in background, gender, nationality, and age — we were able to pinpoint:

The four most pervasive reasons why
there is skepticism and fear of self-driving vehicles

Trust and Safety

Topping the list is the overall belief that humans remain best suited to command the driving experience. They readily cite the isolated instances of accidents involving self-driving cars among the top reasons. In other transportation experiences where much of the process is automated – flying aboard a modern commercial jetliner, for instance – there always is a human who will reassuredly step in, they say, if something goes wrong.

The amount of engineering that underlies the self-driving experience, in itself, should be reassuring to the public. In fact, one audience member, in a fit of frustration, asked rhetorically why these people would “rather trust an Uber driver than a well-engineered AV?” Interestingly, panelists cited the number of high ratings and successfully completed journeys on an Uber driver’s profile as affirmation that they know what they’re doing. Something that is not readily available for autonomous vehicles today but may be required to convince consumers of its safety in the future.

It was compelling to hear this from a group that has developed a “learned trust” – a sort of symbiotic relationship – with existing driving tech. This is a public that would not commute beyond their neighborhood without some form of a moving map (trusting its computer-intoned directions implicitly as they are uttered from the dash or smartphone).  But it’s a group that has also learned how flawed technology can be – how imperfect it is at times. They have coped with taking their new $1,000 iPhone out of the box, only to find it doesn’t work. They deal with daily, inexplicable disruptions of their WiFi service. Because of these experiences, they have learned what the limits are to technology. As a result, they have developed a skepticism – and in some cases even fear – that only seems to grow with every new announcement about self-driving vehicles. This underscores the growing need to build consumer trust with the new technology as autonomous vehicles are continually developed.

 

Privacy

Millennials have had a love-hate relationship with the technology that guides their lives. On the one hand, dramatic improvements in tech have given this group more powerful tools and connectedness than ever; on the other, the personal information input into these devices and sites has been under assault. The specter that AV technology will further abridge someone’s privacy appears to be a deal breaker for those who would rather cruise in relative anonymity.

 

Hackers and Bad Actors

All the engineering in the world, said these panelists, cannot correct for the mental deficiencies of those who wish to illegally subvert the technology, or use it for harm. Fears include hacking of cars to disable features, or to use them for nefarious purposes; or some unstable driver inside an AV who uses it to wreak havoc on an unsuspecting public.

 

Liability

Panelists expressed grave concerns about who would ultimately be held responsible for accidents involving AV tech. If I was not steering the car when it hit that pedestrian, why should I be held responsible for the damage inflicted? Sorting out the chain of liability – whether the mobility provider should offer some sort of supplemental insurance for its self-driving technology, or whether the public, through the act of purchasing or renting the car, should remain the liable party – was a clear precondition of their risk/reward decision about this new technology.

 

Given what we learned from a group of smart, articulate millennials, AV manufacturers will need to deliberately guide consumers down the path to a world of autonomous vehicles – on consumers’ terms. Challenges associated with this include: 1) understanding exactly what these terms are, and 2) responding in an empathic manner to meet consumers’ expectations. Conquering these challenges may well represent the Holy Grail between reticence and broad adoption.

At Market StrategiesMorpace, we are working with vehicle manufacturers and technology companies to better understand the human factors that will ultimately lead to a future of new, safe, and widely accepted modes of transportation. If we can be of service, please contact us.

Dania Rich-Spencer & Stephan Schroeder – Vice Presidents, Automotive Growth & Innovation

 

More
23
Aug

An Autonomous Future: How the Role of the Consumer Will Impact AV Development

An Autonomous Future: How the Role of the Consumer Will Impact AV Development

For automobile manufacturers, a bold new future has arrived. Technology that adds autonomous features to the driving experience are now available on vehicles by all major manufacturers – inching us ever closer to the day where the driver is a passive, rather than active, participant in the driving experience. To take a closer look at what’s to come, automotive research experts from Market Strategies-Morpace will share their insights in an occasional blog series titled “An Autonomous Future.” In this blog, Chris Leiman, Senior Vice President of Automotive at Market Strategies-Morpace, talks about how consumers are influencing the adoption of these autonomous features.

By: Chris Leiman, Senior Vice President, Automotive

 

When most consumers envision an autonomous vehicle (AV), they think of Tesla Autopilot or a Waymo self-driving car powered by Google. They often do not realize that their brand-new car, truck, or SUV already includes added safety features that already make the automobile more autonomous in nature.

Take the Toyota Highlander, for example. This popular sport utility vehicle is equipped with helpful lane departure warnings, along with a feature that pulls drivers back into their current lane with the power of radar. As soon as the driver begins to traverse against lines on the road, the vehicle ensures he or she tracks back safely.

While these features serve as a subtle introduction to the benefits of AV technology, it’s hard for consumers to escape news of incidents involving self-driving vehicles. From grisly reports of accidents with General Motors’ AVs last fall, to the frightening media headlines warning of robotic systems that decide who dies in a crash, AV developers must constantly walk a thin tightrope.

While pushing the technology forward will allow more people and businesses to benefit from it, factors like societal fears and negative media coverage will also continue to shape the outcome and pace of the industry.

As an automotive researcher at Market StrategiesMorpace, my role is centered on the continuous quest to understand consumers and the decisions they make. It’s one of the primary reasons why I have the opportunity to attend the Autonomous Vehicle Conference, an informative and annual event including speakers from all parts of the AV ecosystem.

Through my work at the company and my insights from this conference, I’ve learned much about the potential impact – and role – the consumer will play in the future of self-driving cars. Here are a few of the main and immediate factors influencing the automotive vehicle industry:


Top Consumer Factors Influencing Autonomous Vehicle Development


Media Coverage of the AV Market

Media Coverage of the AV Market Autonomous vehicle technology bears a variety of safety and mobility benefits, including quick transport and automatic driver assistance features. However, consumer acceptance is still a significant barrier to overcome. This is primarily influenced by the media, which focuses on AV accidents and death without detailing the daily triumphs in the industry.

News programming giants have a saying: “If it bleeds, it leads.” While reporting on a pedestrian being killed by a self-driving car, they leave out comparative data, such as the fact that more than 6,000 walkers and bikers were killed by human drivers in 2017. As fatalities rise, autonomous safety features could help reduce these rates.

This is a primary example of how the AV industry must do a better job managing its own narrative. A combined effort by all members of the AV ecosystem will likely be required to change the tone and provide perspective.


Driver/Rider Exposure to ADAS Features

Driver/Rider Exposure to ADAS Features with AVIn addition to better management of news coverage, exposure to Advanced Driver Assistance Systems (ADAS) features is a critical stepping stone to further consumer acceptance. These include characteristics that are already commonplace in many newer vehicle models, including adaptive cruise control (ACC), adaptive light control, automatic parking, and blind spot monitors. The proliferation of these features, combined with proper messaging and education, will go a long way in developing consumer trust.

One strategy is to gradually expose passengers to the features. Consider the example given by a Lyft representative who spoke at the Autonomous Vehicle Conference. She explained how a self-driving BMW transporting 2018 Consumer Electronics Show attendees included a Lyft employee and a safety driver. Since these two human beings were also in the car, people felt safer. However, the vehicle still completely drove itself.

This speaks to a gradual adoption approach. Once consumers get more exposure to the technology, it will reduce and, presumably, eliminate their anxiety. By safely riding with Lyft employees through multiple rides, for example, the technology will become as familiar as riding in a taxi or regular ride sharing vehicle.

Early technology adopters such as Tesla Autopilot drivers, as well as those eager to try out self-driving cars, will help the industry to convince skeptics over time. Eventually, experts say, benefits like time and convenience will continue to develop within the technology, making them more apparent to the average consumer.


Consumer-Centered Business Models

Consumer-Centered Business Models with AVWe are already witnessing the emergence of various business models in the auto industry. How drivers and riders accept these models will also affect the future development and dispersal of the technology. While companies like Tesla continue to push the self-owned AV, enterprises like Uber and Lyft currently operate with the help of freelance drivers, who are responsible for their own cars.

To become and remain profitable, they will need to develop a viable autonomous vehicle strategy, which could affect their freelance driving program. In addition, the new technology may or may not be acceptable to the consumer. It is possible that the widespread adoption of these brands in their current form will help pave the way for consumers’ autonomous mobility options in the future.

In addition to the ride sharing model, fleets are another option. From ambulances and school buses to programs comparable to Lyft and Uber, maintaining a group of company-owned cars would save money while providing consumers with a seamless experience.

Finally, startups and blue-chip businesses alike will need to focus on the quality of customer experience. From vehicle choices to entertainment options, the enjoyment of the autonomous ride will become nearly as important to the future of the industry as safety benefits.


Ushering Consumers into the AV Revolution

Ushering Consumers into the AV Revolution I’m proud to work for a company like Market Strategies-Morpace that helps AV enterprises use research to support their value proposition. In short, we’ve found that acclimating consumers to self-driving technology while changing the prevailing mindset around AV depends on the in-vehicle experience, how often and how safely they use those cars, and their willingness to pay for the features and services, whether it is their own car or via a pay-per-ride service. Marketing will play a key role for all brands. AV organizations will need to clearly communicate safety benefits and value to their customers to charge for services in the end.

In considering the consumer’s impact on acceptability, I’m reminded of a recent Car and Driver article by illustrious author Malcolm Gladwell. In the piece, he writes about the phenomenon of consumer control. In our society, our ability to choose our vehicle and drive it where we want is a part of the American fabric.

Whether it’s a man who won’t part with his 1968 Corvette or a young mother who doesn’t trust her children to an autonomous vehicle, giving up control of the driving experience will take some time. By staying diligent with market research, gaining better control of the media narrative, and clearly explaining the lifestyle and safety benefits of self-driving cars, the consumer will become more comfortable with – and enthusiastic about – what AVs can do for their lives.

More
16
Aug

An Autonomous Future: Consumer Awareness & Opinion about the Emergence of AV

An Autonomous Future: Consumer Awareness & Opinion about the Emergence of AV

For automobile manufacturers, a bold new future has arrived. Technology that adds autonomous features to the driving experience are now available on vehicles by all major manufacturers – inching us ever closer to the day where the driver is a passive, rather than active, participant in the driving experience. To take a closer look at what’s to come, automotive research experts at Market Strategies-Morpace will share their insights in an occasional blog series titled “An Autonomous Future.” In this first blog, we hear from Dania Rich-Spencer, Vice President of Automotive at Market Strategies-Morpace, about how consumers are responding to these new autonomous enhancements.

By: Dania Rich-Spencer, Vice President, Automotive

 

When Chairman and CEO of General Motors Mary Barra wrote an article for the World Economic Forum in 2016, she stated “I believe the auto industry will change more in the next five to 10 years than it has in the last 50.” Given vehicle companies’ quest to transition from a car maker to a valued mobility company offering services that many of us couldn’t even imagine a few years ago, Barra is spot on about the swift transformation of the auto industry.

While automotive manufacturers have historically described themselves as makers of vehicles for personal and commercial use, today’s OEMs refer to their brands as mobility companies. Yes, they still make cars, trucks, and SUVs – but a combination of new connectivity technology and consumers’ willingness to share products and services now enable auto manufacturers to redefine their relationship with customers – and to enhance the vehicle ownership experience.


A Glimpse into Industry Innovation by Today’s Leading OEMs

A Glimpse into Industry Innovation & AV by Today’s Leading OEMs A variety of popular car makers are investing considerable time, money, technology, and talent to make vast transitions within the marketplace. For instance, the General Motors Marketplace app is considered the “automotive industry’s first commerce platform for on-demand reservations and purchases of goods and services.”

Ford positions FordPass as “the app that amplifies your ownership experience…all to help you get from A to B better.”  Lincoln is redefining the traditional lease with a month-to-month subscription service to better meet customers’ needs and attract younger buyers. Cadillac, Volvo, and Porsche are also offering services to complement the traditional car buying/servicing transactional model.

One may argue that the greatest contribution to this transformation is the development of autonomous vehicles (AVs).  While timelines for fully-developed AVs vary by OEM, there is no doubt they are coming.  It reminds me of the quote attributed to Benjamin Franklin: “…but in this world, nothing can be said to be certain except death and taxes.” Today, self-driving vehicles are also part of the inevitable! In fact, Mcity Driverless Shuttle, “the first driverless shuttle project in the U.S. focusing on user behavior research” was launched beginning June 2018, on the University of Michigan’s North Campus.

I consider myself extremely fortunate to be a part of this automotive industry transformation and look forward to reminiscing with the grandkids about a world before the car was a powerful computing platform that drove itself. However, I often wonder: do other people see this industry transformation in the same light as I do? How does the “regular Joe” feel about the emergence of self-driving vehicles?

Based on my experience as both a vehicle consumer and professional at Market StrategiesMorpace, I know that familiarity drives acceptance of new technology. With that said, how familiar is the general population with AV technology – and how might they see themselves benefiting from these cars?


Insights into Consumer Awareness & Opinion of Autonomous Vehicles Today

Insights into Consumer Awareness & Opinion of Autonomous Vehicles Today To find out, these are some of the questions we explored in the Morpace Automotive Consumer Pulse Study, an online survey* conducted monthly among approximately 1,000 U.S. adults 18 years of age and older.  We noted several surprising findings, including feedback about the level of awareness for self-driving vehicles:

  • Over eight in ten consumers have heard at least some information about companies working on developing self-driving vehicles. This statistic has remained fairly consistent since October 2017, when the study was initially conducted. It is also consistent with other research.
  • While the general public is aware of autonomous vehicles, there is a lot of uncertainty about the implications of self-driving vehicles. People are not sure if there will be more or fewer accidents and fatalities, whether there will be more or fewer vehicles on the road, or if personal ownership will increase or decline.
  • When asked how the development of self-driving vehicles will benefit them personally, responses are almost equally distributed in thirds across “Positive/Negative/Not Sure.”

Since factors like media coverage and clear, enthusiastic, consumer-based marketing affect the current and future awareness of self-driving automobiles, the interplay between these two factors will shape the short-term pace and long-term outcome of the industry.


Demographic Differences in Consumer Awareness

Demographic Differences in Consumer Awareness of Autonomous VehiclesOne aspect is for sure, however – young adults, followed by those with disabilities and those who have lost their license, will be the first to use a self-driving vehicle. In addition, more males than females are engaged with this topic and are more likely to embrace using a self-driving vehicle. Other data shows:

  • Twice as many males compared to females say that they have seen or heard “a lot” about cars and trucks that can operate on their own without a human driver.
  • Almost half of males think self-driving vehicles are positive for them, compared to just under a third of females.
  • Compared to females, almost twice as many males provide a Top2Box rating (9/10) to being open to using a self-driving vehicle.

This gender difference is not surprising to me, but I’m wondering if auto manufacturers are paying attention to the information. Is it too early to charm females to autonomous vehicles?  Given that women influence a significant portion of the vehicle purchase decision, it may be prudent for OEMs to start the marketing process now by crafting a message targeted to women around the positive implications and personal benefits of using and owning an AV.


A Future with Self-Driving Cars

The industry and its consumers are also interested to know which auto maker may be the first to offer a fully autonomous vehicle for personal use. Toyota takes top spot, followed closely by Ford. Similar to their marketing of apps and subscription services, trusted vehicle makers like these must make the benefits of AVs clear to both male and female consumers, as well as those young and old. These include the benefits of Advanced Drive Assistance Systems (ADAS) features, as well as how their self-driving business models will make operating these vehicles both safe and beneficial to daily life.

While OEMs and their partners evolve their marketing strategies, I am optimistic about the future of transportation and the role the autonomous vehicle plays. Here’s to the next few years of unprecedented change – and the wonder it will bring!

 

*The data collected by the Morpace Automotive Consumer Pulse Study are weighted to ensure relevant demographic characteristics of the sample matched those of the U.S. general population.  All respondents are weighted to U.S. Census Bureau demographic profiles for the U.S. population 18+ on gender, age, income and ethnicity.

 

More
29
Jan

How Will Current Economic Conditions and Manufacturers Influence Millennial Car Buyers?

millennial_with_keys

By: Dave Emig, Research Director; Anthony Crechiolo, Market Research Intern

The average price of gasoline in the U.S. has continued to fall the past two years. This past year in particular, the average price of gasoline has fallen from $3.36 per gallon to just $2.42. That’s just over a 38% drop in one year. With many analysts indicating gasoline prices are to remain low into 2017, many wonder what kind of effect this will have on future vehicle sales in the U.S. The answer may lie in how 2015 evolved.

2015 was a record year for automotive sales, coming in at 17.5 million vehicles sold, a 5.7% increase from 2014. Digging deeper, we actually see a drop of over 2% in car sales from 2014 to 2015, while sales of large vehicles were up over 23%. Only looking at these numbers, it seems that Americans have a positive outlook towards the future and are putting their savings at the pump towards a bigger vehicle. This statement may be correct for Americans as a whole, but does it hold true for the next generation of car buyers, Millennials, who are just now entering into the car buying market?

In order to answer this question, I think it is important to first look at how buying a car for Millennials is different than previous generations.

Buying a car used to be a rite of passage to freedom, a way to connect with friends and escape from the parents’ sphere of influence. A car used to give you access to find and define yourself as a young adult. Because of how technology has allowed Millennials to be connected to everything at all times, they tend to break away from their parents’ sphere of influence at a much younger age. However, unlike previous generations, Millennials are entering adulthood at a much later age. Buying their first car still represents this next step into adulthood, but the difference is that this generation has already developed their individual identities before venturing out on their own.

Most Millennials are not entering adulthood until they have completed their secondary education and have found an entry-level job. At that point, they are moving out of the house, figuring out their student loan payments, budgeting daily expenses, putting money away for retirement, and to top it off, looking for a new car. Most entry-level jobs do not provide the income to spend a lavish amount on a vehicle, so Millennials are often restricted to the small or compact car segments because of the limited amount of disposable income they have available.

However, Millennials who are looking to purchase a vehicle have two macro circumstances that make right now the opportune time to purchase a car: low gas prices and low interest rates. There is also the idea, stated earlier, that older consumers’ demand may be shifting away from cars to larger vehicles. This change in demand would keep mid and full size sedan prices low in the short term, but Millennials will likely need convincing to move up from their compact and small car segments.

It seems that Millennials don’t put the same emotion or value on their first car as previous generations have because it doesn’t give them the same type of freedom, as they are already aware of their unique identity. A vehicle to them is more of a machine that serves a functional need – getting them from point A to point B.

But with cars having more connective technology than ever before, will automotive manufacturers use their advertising prowess to convince these first-time consumers that cars can not only keep you connected, but have space for their friends to tag along, too?

Currently, there are hardly any advertisements targeting this group of first time buyers. You see it over and over again, commercials for a mid to full size sedan that emphasize re-kindling that childhood passion. If the idea that the older consumer is shifting from purchasing cars to a larger vehicle is true, it might be time for automotive manufacturers to increase advertising towards the next generation for these types of vehicles. If we see a shift in advertising affordable mid to full size sedans to first time buyers, the automotive industry could continue to boom.

As a result of the recent recession, Millennials feel an increased emphasis on not overextending themselves financially. As you move further along in life and become more financially secure, then you can push your financial boundaries. This trend can be noticed with most Americans; as they move up in their career, they also move up in vehicle class. If automotive manufacturers realize this and are able to persuade these first-time buyers into the purchase of a larger vehicle, they will make more money over time, since this type of buyer moves up the career path more quickly because of their higher starting point.

Will automotive manufacturers be able to persuade Millennials to spend the extra disposable income they have available on upgrading their first car purchase? Or will they just accept that first-time car buyers will come in at a lower vehicle segment and spend their extra dollars on other technology that will continue to make their lives more connected? The future of the automotive industry is in the hands of Millennials—the next generation of savvy consumers.

More
21
Jan

Are We On the Brink of an Electric Vehicle Revolution?

EV Parking Station

By: Dave Emig, Research Director

As the automotive industry evolves, battery-powered vehicles are being integrated more and more into the car-buying equation. While sales figures for electric vehicles (EVs) are still relatively low, that could soon change.

There are three major factors fueling the potential for increased sales of electric vehicles. First is the adoption of CAFE (Corporate Average Fuel Economy) standards that require vehicle manufacturers to reach a 54.5 mile per gallon average for their entire U.S. vehicle fleet by 2025. This has indirectly motivated manufacturers to integrate EVs into their product portfolio. As such, the level of competition between manufacturers has increased, allowing for a few start-ups to emerge, thereby promoting more rapid change.

Second is the blistering pace at which technological advancements are being made with batteries, such as outputs (power), capacities, and sizes. The most important technological advancement, however, is the increased distance these new EVs can travel, which helps to curb range anxiety and fit the needs of many more consumers.

While these two elements have greatly aided in the proliferation of EVs, the third factor, the design of these vehicles, has also become more important. Manufacturers are moving away from the outlandish, quirky designs and creating vehicles that are more conventional and aesthetically pleasing. But it’s not just all about design—these modern EVs are now offered in different sizes, from small compact cars to large utilities!

The combination of these factors, along with the growing confidence of consumers in EVs, is spurring interest. However, adoption of EVs is still in its infancy, primarily due to a lack of familiarity. While there are some early adopters who have done their research, became comfortable with the idea of an EV, and took the leap, they find many consumers are playing the waiting game. Whether the consumers have no interest at all or don’t feel an EV will fit their lifestyle, they just can’t bring themselves to purchase one at this time.

Manufacturers who are interested, but waiting, find there are a number of hurdles to overcome before general consumer interest increases to a serious consideration to purchase. Consumer concerns over purchasing EVs are understandable. After all, outside of buying a home and the cost of higher education, a new vehicle is the largest purchase many consumers will make in their lifetime.

While “fear of change” may ultimately be the primary barrier, many consumers indicate deterrents like a lack of infrastructure (charging stations at work, close to destinations, etc.), the length of charging time required if unable to use a 240V or supercharger, complexity with home installation (with some not owning a home with a garage), and worries about the longevity of the battery. But, resoundingly, owners emphasize that there is a serious lack of knowledge when it comes to the dealership experience. Often times, consumers need to find answers to their own questions. The role of the dealership staff to help educate consumers about the advantages of the EV and how they function is critical. If the sales staff at a dealership aren’t invested in the concept of EVs or comfortable selling them, chances are sales will lag, meaning dealer commitment is crucial.

Let’s face it, with any change comes some level of anxiety. It will always be present. As EVs evolve, many of the current hurdles will disappear, yet if the consumer does not understand or have confidence in the product, they will not buy.

So how do dealers manage this shift?

We performed Morpace-managed client focus groups with electric vehicle and plug-in vehicle owners in 2015 and discovered a few key points that can help answer this question. Consumers who have purchased an EV were more enthusiastic about the vehicle and had more knowledge than dealer personnel. This knowledge gap has a negative effect on the decision to purchase, but there is a solution to consider–appoint a sales person who lives and breathes electric vehicles. This sales person would drive the car(s) daily, know the cost per mile (very important to consumers!), be able to identify charging locations around consumers’ work, office, and daily route, explain the ancillary benefits such as free parking, and be able to respond confidently to any questions, especially those concerning range anxiety. “Having those sales folks that really understand it [EV technology] is going to be crucial…The knowledge about electric cars needs to be in the hands of the people selling them. People coming in may have great knowledge, but, you have to have that confidence that you’re buying from someone who will be able to support you.”

While fine-tuning the dealership will help, there is more hope on the horizon.

The bright side for manufacturers selling EVs is that many current owners indicate they have no desire to go back to a conventional engine for their daily vehicle. They despise buying gas and love the driving experience of an EV. Owners find the lack of engine noise, instant torque, and shifting to be extremely appealing , summing it up by mentioning that “a gas car now just feels mundane. It doesn’t feel as sophisticated”. As a result, these owners have become staunch advocates. Word of mouth is the best form of advertising… and it is FREE!

But how do you get someone who is still skeptical to actually take that leap? Sell them a used EV!

There are a large number of EVs that will be hitting the market in the coming year. Dealers and manufacturers will want to move them as quickly as possible, which means consumers could get an EV for quite a bargain. The financial commitment for a used EV will be less of a burden and should entice those who are playing the waiting game to take the plunge.

However, a primary concern remains: How reliable is the battery? The dealership can do their part by providing the expertise, but consumers want assurances, primarily an honest warranty on the battery (or straight up replacement). They want the warranty to guarantee the range and charging cycles, freeing them from concerns with degradation. “Dealers need to test the battery, if it meets a certain range, then they’re good to go. They need to provide a warranty and guarantee that the vehicle will at least go a certain range.” Ideally, manufacturers and dealers could develop a specific, rigorous pre-owned program unique to EVs in an effort to quell consumers’ key concern surrounding the battery and make used EVs even more appealing.

While familiarity and interest in EVs is growing, manufacturers and dealers will need to find ways to combat consumer fear, getting them past the tipping point to purchase. Current issues with selling used EVs need to be addressed to get consumers in the vehicle to experience the benefits that so many current owners relish. To do this though, dealers need to be committed. If they can find a way to adapt the sales experience to give consumers the information they want in order to curb concerns, we may be on the brink of an EV revolution.

As production increases over the next few years, manufacturers who are in the EV game will be primed to make a splash as current used EV owners will be looking to buy a new EV.

More
6
Jan

Electric Vehicles: A Smart and Economical Choice for Small Businesses

photo 1

By Michael Schmall, Vice President; Kimberly Doherty, Project Director

When you think of electric vehicles, the terms “practicality” and “affordability” are probably not the first things that come to mind — especially for a small business. That perspective could be changing, as electric vehicles continue to bring new and modern dynamics to this automotive segment.

The fact that electric vehicles are more attainable and desirable for small business owners is evident when we spoke with Tracey Stroia, owner of the all-electric Smart car used for deliveries at TV’s Deli & Diner, located in Trenton, Michigan.

“Food delivery has been an offering of our business for over eight years, and it continues to be an important primary service we provide for our customers,” says Stroia. TV’s Deli & Diner also features a catering business and has several traditional cargo vans that are used for select deliveries. In the past, these vans were utilized for all deliveries, even when individual delivery orders came into the restaurant.

Between the businesses’ young drivers—who weren’t very experienced at driving the larger cargo vans—and fluctuating gas prices, Tracey recognized the opportunity to consider alternative vehicles that are better suited for her business’s delivery needs. Keeping an open mind during her search led Tracey to realize that not only would a smaller vehicle reduce gas costs, but an electric vehicle could eradicate them all together. As a result, Tracey began to entertain the idea of leasing an electric vehicle, which could potentially slash overhead delivery costs and provide a major source of savings for her business.

After further exploring her options, Tracey decided to choose an all-electric vehicle for her business’s deliveries. She did not start out her search with a specific electric car in mind. In fact, Tracey was very flexible about what make and model vehicle she would consider. Her “open-minded, what-is-best-for-my-business” approach eventually led her to consider a Smart brand vehicle. The Smart Electric Cabriolet caught Tracey’s attention because of its affordability and cost-reducing characteristics. To her surprise (and eventually to her staffs’ surprise as well), this vehicle had quite the “get-up-and-go” power and was ultimately spacious enough for even her 6’4” employee to ride comfortably in, while still allowing enough additional space for the food being delivered.

There is no doubt that the overall pricing available on this vehicle was the number one feature for Tracey. Tracey did the math — she wasn’t going to lease any vehicle that did not optimize her business. With a monthly lease program that was less than the average cost of gas per month on one of her delivery vans, choosing the Smart vehicle was an easy decision.  The fact that her “Smart” choice was an electric vehicle and doesn’t pollute the environment is an added bonus for her, in addition to the cost savings it continues to provide.

Tracey finds leasing her Smart car to be an environmentally sound choice that hasn’t sky-rocketed her electric bills. It has offered more stability in the cost of running the delivery portion of her business because it creates insensitivity to the volatility of gas prices. For Tracey’s small business, owning and operating an electric vehicle simply makes good business sense.

Employees of TV’s Deli & Diner enjoy driving the car around town and find it to be not only surprisingly quick, but also a pleasurable driving experience. The Smart car was a unique vehicle that stood out to Tracey, and it continues to be well noticed among TV’s customers. The fact that it is an all-electric vehicle, modified with TV’s Deli & Diner advertisement, and charged right out front of their restaurant, creates quite the buzz.

“I’ve had loyal customers who [because of the vehicle] just now realize that we deliver,” Tracey stated, emphasizing that the vehicle doesn’t just save gas money, but also attracts new delivery customers. The positive response Tracey has received from the unexpected marketing and tell-tale uniqueness of her small electric vehicle was an additional advantage that wasn’t anticipated, but is much appreciated.

Tracey’s experience relates to business owners’ vastly expanding awareness and willingness to consider alternative powertrain vehicles. It is also a reminder that, ultimately, small businesses will make decisions that are overwhelmingly based on their economic merit.

More