WHILE OTHER COUNTRIES are pushing forward with the adoption of electric and alternate fuel vehicles, Australia’s uptake lags far behind. Stewart Stropp, Senior Director of Automotive Retail at J. D. Power, suggests the way forward is through outreach and education.
If the automotive industry expects consumer demand to catch up with the paradigm shift from internal-combustion-engine (ICE) vehicles to electric vehicles, more effort will need to be focused on engaging shoppers beyond the early-adopter and EV-aficionado crowds. A broader pool of consumers must be developed to expand the market and ensure demand is in place to absorb projected production capacity.
This is one of the central conclusions of the inaugural J.D. Power U.S. Electric Vehicle Consideration (EVC) Study, led by Stewart Stropp, Senior Director of Automotive Retail and J.D. Power.
To better understand how key stakeholders can help the industry move forward, we caught up with Stropp. Here’s what he had to say.
seniordriveraus: With all of the disruptions from the COVID-19 pandemic, how have you seen consumer attitudes about EVs evolve? What are the key issues on the minds of consumers (including non-EV owners) as they consider their options?
Stewart Stropp: That’s a tricky question. The automotive industry is in a tough place when it comes to completely switching over to EVs. In many cases, EVs have not yet reached a point where demand is high enough to justify switching over completely to all-electric fleets. Consumers continue to have nuanced and understandable concerns including range anxiety, confusion around charging capabilities, and entry price.
Plus, the semiconductor shortage is limiting the number of vehicles OEMs (original equipment manufacturers) are able to manufacture. Some are opting to manufacture SUVs and other ICE vehicles that have larger profit margins.
Having said that, there’s no question the race toward electrification is definitely on. But getting there is going to take commitment from all stakeholders working together to better educate consumers and create unified messaging that resonates with everyday shoppers. The industry will need to move beyond the “going green” message which, at least at this point in time, is far more important to shoppers actively interested in EVs than it is to everyone else.
Understanding what consumers need to hear and learn about EVs was the reason we launched the J.D. Power U.S. Electric Vehicle Consideration (EVC) Study. And we’ve learned a lot from it, but two key points really stand out:
- Consumers must experience EVs for themselves. Based on what we see in the study, half of the car-buying population has never actually been in an EV. For these people, the chances of considering one for purchase is only seven percent. But when consumers have the opportunity to sit in, ride in, or otherwise experience an EV, their consideration shoots up almost three multiples to 20 percent.
Almost any experience counts. If a consumer rides in a friend’s EV, or an EV taxi, or they go for a test drive at a dealership – all of those things count. And the numbers are even more impressive among people who have owned an EV. Their consideration numbers jump up to 46 percent.
- Lack of information is holding EV sales back. One in three non-considerers – literally 30 percent – say they are not considering EVs because they just don’t know enough about them. They need help making sense of the financial incentives – like tax credits and utility rate adjustments – or practical considerations – like charging accessibility and capabilities.
seniordriveraus: Can you tell us a bit about what various stakeholders can do to increase consumption and advance EV adoption?
Stropp: There’s a lot that can be done to increase knowledge and improve demand. The two key levers to pull are experience and education. There are several courses of action OEMs, dealers, and other stakeholders can take to increase engagement and ultimately adoption of EVs.
- Experiential Marketing: Various brands have offered take-home test drives for some time now but, based on the connection between first-hand experience and EV consideration, it could prove to be a particularly effective tactic for EVs. The same can be said for ride-&-drive events. These types of events could shape up to be critically important for bringing to market a new generation of EVs from both incumbent and start-up brands. A unique spin on this option might be for OEMs to partner with non-auto retailers and venue operators – think music festivals, shopping complexes, and sporting events – to host ride-&-drive events within the communities where people live and work. These types of engagements have been curtailed as a result of the COVID-19 pandemic, but as we start to see a return to some semblance of normalcy, we can expect these types of events to pick up again.
- RideShare Opportunities: There has been some discussion in the industry around incenting EV owners to be rideshare drivers (Uber and Lyft, for instance) as a way to get more shoppers – in this case, as passengers – to experience EVs. In some countries, taxicab companies have invested in EVs as a way to reduce their overhead and fleet fuel expense. This type of engagement is a triple win: the taxi company, consumers, and automakers all benefit from reaching more people in a unique way.
seniordriveraus: Are there any other factors you believe dealerships and OEMs should consider to entice people to buy EVs?
Stropp: One of the top reasons cited by EV non-considerers is sticker price which, at this point in time, is typically higher than ICE comparator vehicles. It’s imperative that dealerships and OEMs shift the financial conversation away from sticker price toward the total cost of ownership. There are substantial savings to be harvested throughout the ownership cycle of EVs. Things like utility rate adjustments for their homes, maintenance savings, fuel savings, and tax incentives offered at the federal, state, and local levels should all be clearly communicated to shoppers as they’re considering EV options.
Great education tools dealers and OEMs can offer consumers are online calculators to make it easy for shoppers to plug in numbers and estimate the savings they can get as an EV owner.
In short, education and engagement is the name of the game right now at the retail level. The early objective should be to physically get as many consumers into EVs as quickly as possible. The long-term objective is to create a baseline of EV literacy allowing vehicle shoppers to demystify EVs and help people better understand the implications and potential benefits of moving to electric-powered personal transportation.
Stewart Stropp is a Senior Director of Automotive Retail at J.D. Power and author of the J.D. Power 2021 U.S. Electric Vehicle Consideration (EVC) Study.
J.D. Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, J.D. Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years.