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Marketing the Electric Car / Crossing the Chasm

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doug

Administrator / Head Moderator
Administrator
A fairly comprehensive article on the marketing of electric cars:
Selling the Electric Car - AdWeek
...with rollouts just around the corner, automakers concede that they and their agencies face a substantial hurdle: changing the consumer perception that electric cars are more trouble than they're worth. Issues include "range" anxiety -- the fear batteries will run out before drivers reach home due to a virtually nonexistent charging infrastructure -- to higher price points and the need to learn about the various options in the new category.

"The threat to any new technology is that 'c' word: 'compromise,'" says Mark Turner, chief strategy officer of Saatchi & Saatchi in Torrance, Calif., which handles advertising for Toyota, which plans to roll out a plug-in Prius next year. "The U.S. consumer is especially loathe to compromise," he adds. "It's not in our DNA. ... If I look at the electric vehicles offered in the near future, my gut tells me many consumers may [indeed] view them as a compromise. It's a functionality and price issue. At the moment, it's easy to own a car with a conventional gas engine."

...

[Mark Perry, director of product planning at Nissan North America] predicts, however, that the early adopters, at least, will come fairly easily. "They're waiting for this and are saying, 'What took you so long?'" he says. (He estimates that Nissan has 20,000 initial orders for the car.)

Reading this article reminded me of this graph:
800px-Technology-Adoption-Lifecycle.png
 
Marketing Disruptive Technology

Thanks a lot Doug! I ordered the original reference and will read it. On the possible impact of electric vehicles as disruptive technology a very well made study has just been published by Deutsche Bank (in English). The study should be read in full and not just commentaries based on snippets from the executive summary, copied from other journalists. It is titled: "The Peak Oil Markets". Their scenario is a very favourable backdrop for marketing electric vehicles. With a bit of luck Tesla has fair chances of bridging "the gap".
 
Jack Rickard crunches the numbers on the acceptance chasm (bold is mine):

...
If we take ALL the electric cars manufactured in the past twenty years, including the 37,000 GEM's and EVERYTHING ELSE, we don't have 75,000 cars on the planet. And I don't count 99% of those as even being an electric car capable of being a solution to anything.

If we count only LiFePo4 cars, the numbers get to be pretty miniscule. IF Leaf sells 12,000 cars in 2011, AND GM sells that many Volts, which it won't and which isn't even an electric car, and we count the 2400 Tesla's, all the iMiev's every prototype built by all manufacturers, we are at less than 30,000 cars.

EVALBUM lists 378 vehicles currently as Lithium Ion driven vehicles. Two thirds of those are actually bicycles and lawn mowers. But if we say half, we have 185 Lithium ion powered cars. If we assume that EVALBUM is one out of 10 in existance, that is still less than 2000 home built Lithium cars.

32,000 cars TOPS.

Now let's look at Rodgers curve. He indicates that the first 2.5% of the market is the tinkerers and innovators. Let's assume the United States is the only market that matters, a dubious concept as gasoline is $8 a gallon over all of Eaurope. We have $255 million active automobiles currently registered.

To be 2.5% of that would require 6.3 million Lithium Ion powered vehicles. That's the point at which tinkerer innovator development is mature enough to appeal to EARLY ADOPTERS. Do we HAVE 6.3 million such vehicles? Are we close?

This is a world changing, game changing, totally disruptive techology - the Lithium ion electric car. It is TRULY different from previous electric cars in that it actually can be used as practical personal mobility - transportation. Not that it can be used heroically. It can be used easily. I do it every day.

But we aren't at the real START of the innovator level. And we won't be for another 6.27 million vehicles....

He does not opine when 6.3M will happen as many have but you really have to have faith to build a new EV and EV related business around that future number. Though a 5M customer base is not a bad niche for some.
 
He does not opine when 6.3M will happen as many have but you really have to have faith to build a new EV and EV related business around that future number. Though a 5M customer base is not a bad niche for some.

I'm sure Nissan is operating with numbers like that, and so is Tesla in its preparations for its third generation car.
 
Mod note: moved from Fisker Karma & A123 fail

picture_rogers_adoption_innovation_curve.gif

:

I believe EVS are in the chasm now.

technologyadoptionlifecycle3.jpg
 
Last edited by a moderator:
I believe EVS are in the chasm now.

technologyadoptionlifecycle3.jpg

Based on the percentage the adoption curve is using, are we not still in the 2.5% Innovators portion? With the issues surrounding the Fisker, A123 and Volt, I can understand the perception that the curve has entered the "Chasm" i.e. "the make or break" of a product. I am pretty sure 16% of the public has not adopted the EV.
 
I guess you have to look at the percentage of cars sold in each segment. How many cars in the Nissan Leaf segment sold last year and what percentage of those were Leafs?

When digital cameras came out there were super high end (Tesla Roadster) scientific imaging cameras and low end 3mb consumer cameras (Thinks). The percentage of total cameras sold, Pro 35mm-semi pro APS, large format and specialized cameras would not be a comparison of like products the new digital cameras were encroaching on.
 
As there has been a ton more shall we say 'interesting' posts in the recent bad press, it dawned on me that TM might be nearing the end of the chasm.

Here's why: We are now seeing more posts from people just getting a taste of the Tesla experience, asking the "new to EV" questions and generally joining the conversation. This is great and I think it is important to note that while there has a been a ton of bad press, we all know that the numbers are still good for the company as a whole. Demand is a difficult beast to tame and then maintain, but the product speaks for itself and TM is doing some very interesting things to meet it head on.

It's sometimes hard to hear/read people seemingly joining the conversation only from the bad press and to say negative things, but they are joining nonetheless and I'm hoping at least some will bring a fresh perspective from a thoughtful vantage. It is hard to weed out, but due to the large percentage of new posters I'm sure the mod's are a bit more overwhelmed than usual ;) and we might be seeing some of that overspill. Regardless, it shows there is more people willing to join the conversation as they have found this site and that is a good thing.

As we come through the chasm I would like to point out that the business model must be proven sound in that all aspects of getting the money to refund the development cycle must be attained. I don't claim to know all of this, but do know enough to know that the manufacturing aspect is sound. All data points towards a very sound engineering iteration improvement engine is hard at work tinkering in all the right places. The cars are getting better and my car is holding together very nicely as are others with even more miles than mine.

Can TM exit the chasm without first introducing and proving demand for the Model X? My gut tells me yes as it would seem that even selling 20K Model S's a year would have proven by demand only. However, you've still gotta make money and refund the development cycle. Is that happening with the X? With GenIII? It would seem so as TM is announcing deals with bottleneck parts and clearly articulating where they see the company heading.

With the recent bad press I'm again reminded of other evolutionary products (aka the modern smartphone) and the early problems (edge network, massive bills, hardware/software issues), naysayers (large companies writing the technology off) but demand was there, the product was supported, customers were generally happy enough to buy again, the company had enough money, knowledge and stability to make a newer, better model and the rest is history (or most likely in everyone's pocket, everyday and invaluable to those that use them).
 
Seems you guys are getting ahead of yourself. 2.5% of vehicle sales just to get out of the innovator stage and the start of early adopter would mean 300,000 EV sales based on 12M sales per year (which just came from the top of my head...I don't know what the exact number is). Were all still innovators here.

I do agree that Tesla has such a compelling product that they seem to be speeding through this adopter curve, and are picking up customers who would ordinarily not be part of the innovator group, but that does not mean that we have really skipped that step, there are still a lot of people with questions about EV's, but Tesla is making it easier to explain what its all about.