As Race to Build EV Demand Heats Up, Automotive Industry Should Focus on Consumer Outreach and Education.
Editor's Note: This article comes to us as an exclusive byline from JD Power, authored by Stewart Stropp.
- To move beyond early adopters and EV aficionados, the auto industry will have to establish short- and long-term consumer engagement goals
- Key industry stakeholders should work together to increase outreach and expand consumers’ in-person experiences with EVs
- In the long run, moving the sales needle toward EVs will call for building a baseline of EV literacy allowing shoppers to demystify the technology
A broader pool of consumers must be developed quickly over the next few years to expand the market and ensure demand is in place to absorb projected electric vehicle (EV) production capacity. This is one of the central conclusions of the inaugural J.D. Power 2021 U.S. Electric Vehicle Consideration (EVC) Study.
Achieving a critical mass of demand will require joint commitment from all stakeholders in the automotive value chain. Manufacturers and retailers will have to work together to better educate consumers by creating a clear, unified message that resonates with typical consumers. Moreover, the industry would be well advised to move beyond a “going green” message to clearly describe the practical benefits EVs can deliver to enhance the day-to-day lives of those who make the switch from conventional internal combustion engines (ICE) to EVs.
The good news is consumers are receptive to engagement activities and messages about the positive attributes EVs offer. Two key points stand out from the inaugural J.D. Power study:
1) Consumers who experience EVs for themselves are much more likely to buy. Approximately 50% of the car-buying population has never been in an EV. Among those, only 7% indicate a serious interest in replacing their ICEs with EVs. By contrast, when consumers have an opportunity to gain first-hand experience with an EV, their consideration shoots up to 20%.
Almost any experience counts. If a consumer rides in a friend’s EV, an EV taxi or goes for a test drive at a retail location, interest rises. And the numbers are even more impressive among people who have owned an EV. Their consideration jumps to 46%.
2) Lack of information is holding EV sales back. One-in-three respondents in the study state their reason for not considering an EV purchase is a lack of knowledge. Many shoppers are unaware of or understandably confused by the many financial incentives available to encourage EV acquisitions (e.g., tax credits and utility rate adjustments). Nor have they been exposed to the growing infrastructure emerging to enhance the ownership experience, like charging accessibility and capacity.
Strategies to Increase Consumer Education and Advance EV Adoption
There are several courses of action OEMs, retailers and other stakeholders can take to increase engagement and, ultimately, adoption of EVs.
- Experiential Marketing: Take-home test drives have proven to be an excellent engagement tool for establishing a first-hand connection with new EV buyers. The same can be said for ride-and-drive events. Even if consumers don’t immediately buy, these types of events and experiences lay the foundation for bringing to market a new generation of EV owners. The concept can even be expanded through OEM and retailer partnerships with non-auto retailers and venue operators. Working with music festival organizers, shopping complexes and sporting event promoters offers an excellent opportunity to host ride-and-drive events near where people live and work. While these types of engagements have been curtailed because of the pandemic, it is likely to emerge as an important activity as the economy returns to some semblance of normalcy.
- Rideshare Opportunities: Another consideration is to provide EV incentives to rideshare drivers. It is a terrific way to expose the general population to the EV experience. In some countries, taxicab companies have invested in EVs to reduce overhead, maintenance, 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 an immersive manner.
If the industry expects consumer demand to catch up with the growing EV supply, creative efforts to get potential buyers into these vehicles will be the key to moving beyond early adopters and aficionados.
Stewart Stropp is a Senior Director of Automotive Retail at J.D. Power and is the author of the J.D. Power 2021 U.S. Electric Vehicle Consideration (EVC) Study.