So many things are now happening within the mobility space, all at the same time, that there seems to be some new momentum for change. It’s now getting much harder to see that we might go anywhere but forward. More electric vehicles have been purchased by more open-minded buyers. More fast-charging infrastructure has been deployed. More new EV models are being launched. And more government and local resources have been provided along with policies designed to accelerate more EV adoption.
And as automotive companies change themselves, such as how they are organized (Ford), how they wrestle with becoming software providers (VW), and how they can vertically integrate for the new EV world by buying mining access (all), many other related things are happening too. For example, Ford has told its US dealers that by the end this month they need to commit to being an electric vehicle dealer, with the training and infrastructure Ford requires, or they will only get Ford’s internal combustion vehicles to sell. Sounds like an “ultium-atum” to use another maker’s term. Yet even with this kind of “take it or leave it” approach, the Ford Dealer Council prevailed and Ford agreed to create a middle pathway for smaller dealers to invest, an “EV lite” approach so to speak, so these dealers can sell a few EV’s per month and stay in the game. It’s clear that, at least in the US market, that if we do not respond to rural needs and enable the EV intenders in the middle of America, where there currently are few charge points for example, then we will limit the overall adoption rate of EV’s nationwide.
https://techcrunch.com/2022/09/14/ford-gives-dealers-an-ultimatum-on-ev-sales/
So companies like Ford are using the catalyst of this product change to electric vehicles to modify their sales approach as well. In the surface, it does not seem that a consumers choice of powertrain should change the sales model, but since Tesla and other new EV makers are selling their cars directly, or through an “agency” model, Ford and the other legacy automakers are right to explore this route as well. It’s easy to recall GM’s Saturn brand, which didn’t allow prices to be negotiated, so consumers knew the price before they arrived at the dealership. This worked well enough, but since Saturn’s product plan was starved, no new product meant that Saturn went away, regardless of the sales model.
And EV’s too will live and die by product selection and performance, not sales and distribution models. Consumers will always seek out and find a new product that has great value and exceeds their expectations. Tesla is the EV market leader not because of how it sells its cars, but how they work. While Tesla needs to bring out more accessibly priced models, it’s clear their basic product portfolio, with sedan’s and crossovers, are popular even though they are all at the higher end of the EV market. Having a network of Supercharger stations, that are easy to use, and widely deployed, and recently providing an adapter for owners to use chargers from other companies, means that Tesla continues to enable its new owners to have a positive EV experience.
https://cleantechnica.com/2022/08/26/us-electric-vehicle-market-growing-yet-tesla-still-dominates/
Recent research from JD Power shows that currently over 26% of all new car shoppers are very likely to purchase an EV within the next 12 months. And while Tesla still dominates the brand consideration for these potential EV consumers, Ford, Chevrolet, Toyota, and Hyundai are now right behind. This is because of all the new EV models coming from these companies, like the F-150 Lightning, the Chevrolet Blazer, and the Hyundai Ioniq. New product gets all the marketing money in the automotive business, and when you see enough “EVerybody In” ads (from GM) you might become curious and start to look closer at buying an EV. When we have over 1 in 4 new car buyers saying they are considering an electric vehicle, we are on the cusp of much faster adoption. Actual EV sales are just over 6% in the US market currently, so this means that 4 times more people are considering an EV today.
Maybe the real challenge for the industry is simply not to disappoint these “willing” buyers, and to make sure their questions get answered the first time, wherever they look for information, either online or on the showroom floor. Reducing their “home charger-install anxiety” for these prospects might also be important now, as “vehicle range anxiety” is quickly becoming a thing of the past with 500 mile range EV’s now. Local, familiar, and understanding auto dealers would be great places to get all this selling done. Think about the early days of cell phones, and the “stores” from the cellular carriers. Customers could buy the device, buy the plan, get their questions answered, all with one stop. Of course as the carriers moved to more sales online, and self-service, much of this experience was eroded. We need to make sure the “EV buying experience” becomes easier and easier. Maybe this is part of what is driving Ford and others to “seize the day” and change their approach to EV’s.
Who will benefit? Well, consumers will get new technology vehicles that have lower operating costs, with an easy sales experience. Automakers and suppliers will be able to participate and earn revenue across the ownership cycle, from initial sales and “over-the-air” (OTA) software updates. Dealers will have an opportunity as well, selling generally higher-transaction priced EV vehicles, but still having many service and repair opportunities beyond the powertrain, and perhaps participating in battery recycling and “energy storage systems” (ESS) redeployment of vehicle batteries. Local governments will have cleaner vehicles and quieter traffic. Utilities will have plenty of roving electricity “storage” too. And the planet will have less greenhouse gases contributing to climate change. Sounds pretty good to me. Let’s all “carpe diem” to a greener future!
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