Commentary
Telling The EV Story: Why Building More Charging Stations Won't Boost EV Sales
- by Ted Page , October 24, 2013
A consortium of New England states has announced efforts to make it easier for states to spur the use of electric cars, such as putting in more charging stations. Meanwhile, carmakers are scratching their heads, trying to beef up sales that are stuck in neutral. Sales of the Chevy Volt are averaging about 22,000 per year, about the same as last year. The Nissan Leaf’s sales are comparable. All of which is not by any stretch going to help the Obama administration meet its stated goal of having one million EVs sold by 2015.
What’s wrong with this picture? I would argue that adding charging stations will definitely help, it’s not the number one thing that’s preventing EVs from taking off (or least speeding up a little). The main problem is that consumers don’t understand the value that electric cars offer them. The reason is simple: Nobody is telling it to them clearly.
Take the Chevy Volt. The website says it’s the “Best of Both Worlds.” So, gas and electric in one car. But that benefit is getting lost in the high cost of the initial purchase of the car. The Volt is listed on the site as available “for as low as $26,685.” That’s not low cost in relation to super efficient all-gasoline cars. By comparison, GM’s own Chevy Cruise costs about $17,000, and offers a snappy diesel that gets 46 mpg on the highway. GM is actively competing against itself, with the Cruise clearly winning. GM sold 231,000 Cruises in 2011 alone.
To connect with consumers, we need to focus on their real pain point when it comes to driving. And that’s the cost of gas. Gas prices have dropped recently to around $3 a gallon, but for U.S. consumers accustomed to driving often long distances, those costs add up.
To find out why buying an electric car makes sense, you have to work hard and dig for the answer. I found it buried in the copy of a brochure published by the Northeast Electric Vehicle Network. It states “The average cost of electricity in this region is 13 cents per kWh, which is the equivalent of driving with gasoline that costs about $1 per gallon.” Bingo! And if you’re driving in other parts of the country, like Oklahoma, your cost per kWh is likely far less than in the costly Northeast. The headline for selling electric cars to consumers should be more like this: “Ever want to go back to the days when gas cost less than a buck per gallon? Actually, you can.”
Put another way, an EV is a time machine that takes you back to 1979, the last time gas cost a buck per gallon in the U.S. The ad headline is: “It’s not a car. It’s a time machine.” Or, “Go back to the days when gas cost a buck per gallon, without having to wear bell bottoms or listen to John Denver.”
Carmakers are, in journalist terms, burying the lead – the one thing that would make people hop on the electric vehicle bandwagon. States can build all the charging stations they want but it won’t matter, because people won’t buy a car they think is more expensive. The good news is that, with the right marketing and branding, EVs can finally get some traction and pull ahead of their gas-powered competitors.
Ted, as a fellow Media Post columnist and avid EV and solar power fanatic I was excited to read your column. I think you've definitely hit on a key aspect (poor story telling) of modest sales of the Volt and Leaf. However, EVs are actually outselling hybrids at the comparable stage - but we are still very early in the development and adoption of EVs.
There are actually several factors holding back EV sales from exploding sooner (they are, however nearly doubling each year), including:
- Choice: There is very little (Leaf and Volt which is not even a full EV, and the Tesla Model S, which costs $85K to $100K+). The others Ford Focus, Toyota RAV-4, Chevy Spark, Fiat 500e, etc are barely available, not marketed, etc... The upcoming BMW i3 looks to create some excitement in the market. But until there are dozens of good choices of EVs ... sales will not explode.
- Design: Except for the Tesla Model S - most of the EVs and PHEVs are boring, ugly or just not exciting. Tesla is the only EV that is aspirational and doesn't look like a, well EV. Millions of people want the Model S - but only tens of thousands can afford it. The opposite is true about the Leaf, Volt, etc.
- Range: Most pure EVs (except the Tesla Model S) only have a range of 80-100 miles. Even though most people drive less than 40 miles per day - Americans are freaked out about range anxiety. As batteries come down in cost the next few years, average range will increase toward 150 miles - which will greatly increase demand.
- Charging Time/Infrastructure: Most apartments don't yet have chargers; and it costs a few thousand dollars typically to install chargers at home. And most EVs take several hours to charge (yes, except the Tesla). People need to have a mindset change ...and Tesla expects to have a SUper Charger in the next 2-3 years that will charge a Model S to half capacity in 5-10 minutes. This will be huge.
- Cost: EVs are priced well above similar models. Until the cost narrows and it is then easier for a buyer to understand the cost savings of electricity powered over gas powered ... sales will not take off.
- Solar: In Calif where I am, more than 50 percent of EV owners also have solar panels installed. The two are interconnected - the more people who install solar, the more who will buy an EV. And solar is about to explode in the next few years.
- Ultimately I believe it is mostly about supply. The car companies simply aren't that interested in EVs right now as their sales are doing well (for most) and building and marketing new EV platforms is very expensive - just at a time when their financials are looking up.
Could the auto companies do a better job marketing EVs and PHEVs? Absolutely, but until they get excited about EVs and start building dozens of models that offer quality and choice at a comparable cost to ICE cars ... only the greenie/early adopter types are going to take the plunge. Looking forward to more columns on the topic.
Loren
Loren,
Thank you for the thoughtful feedback and insights. Having more choice in EVs will certainly help. And there are clearly a range of other important factors limited the real potential of EVs. Most of this seems to come down to economics in some way.
Ted
Great post, Ted.
I always love reading about "Ah-Ha" moments in advertising, and I think you really tell a valuable story here.
Looking forward to seeing where Captains goes as a leader in environmental content marketing and beyond.
It ain't the gas...it's the batteries:........
http://lairigmarketing.typepad.com/lairig_marketing/2012/02/in-batteries-we-trust.html