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Heed consumers on electric cars
By Klaus Paur |
September 19, 2011, Monday
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Print Edition
Print Edition
ELECTRIC vehicles are a matter of national importance in China. Recent remarks by Premier Wen Jiabao have confirmed the ambition of China to be a leading player in the development of new energy vehicles. He has reminded all industry players about the need for a clear development plan to achieve the high-flying goal of 5 million new energy vehicle sales by 2020.
Indeed, there are only an estimated 10,000 electric vehicles on the road in China today. The vast majority of them are operated by institutional owners in several pilot projects across the country.
Most car manufacturers, including Chinese domestic makers, have showcased alternative energy vehicle concepts and prototypes at auto shows for some time already. For most of them, though, electric vehicles appear to be more a marketing exercise at this point rather than real market offerings. Out in the real world, electric vehicles are practically not available for individual buyers.
This is due to the fact, many would argue, that battery technology is not yet delivering the stable performance required for proper operation of an automobile. These are matters related to energy storage capacity, battery recharging and battery durability.
Technical solutions to these issues are the centerpiece for moving ahead and establishing electric vehicles as a commonly accepted form of transportation. Rightly so. While battery technology occupies the world of engineers, it also assumes a more fundamental significance for consumers because it affects their perceptions about car safety, reliability, and comfort. These are non-negotiable expectations for car purchasers.
Why would consumers want to buy electric vehicles that, in their minds, are hazardous or beset by unreliable performance? Why would they settle for anxiety instead of peace of mind when sitting behind the wheel? To be able to win over consumers, electric vehicles need to respond to basic emotive needs and provide tangible benefits.
Direct experience
When the automobile entered the market more than 100 years ago, it offered quite a few advantages compared with horse-drawn carriages. It was faster, more reliable and durable, more comfortable and "cleaner" (although the meaning of environmental friendly at that time was reduced to the idea of roads without horse excrement). For a higher purchase price, car buyers were rewarded with overall better quality.
The electric vehicle today is generally perceived to offer less to car buyers than the incumbent combustion engine. The driving range is shorter, recharging is uncertain because recharge stations are scarce and the recharging operation takes longer. Maintenance and repair costs for electric vehicles are expected to be higher, along with the purchase price. Green virtues alone can't sell cars.
The consumer's viewpoint has important repercussions for a comprehensive new energy vehicle strategy. Beside the reinforcement of technological research and development activities, the concerns of car buyers have to be addressed.
It is a matter of information and education to explain to the public electric vehicle functionalities and dispel misconceptions related to performance and battery operation. A crucial element is direct product experience, enabling car owners to test-drive electric vehicles and see for themselves. This is why a more aggressive consumer-focused pilot project is a core element of an efficient educational campaign.
In addition, China's idea of leapfrogging technological development and directly moving into electric vehicles lacks the necessary transition process from conventional into new energy technology. That is essential in reassure consumers, step-by-step, with regard to their requirements.
From our market research, we know that Chinese car owners link the capability of developing green technology to the competence of producing conventional technology cars. In other words, the credibility of offering electric vehicles depends on the track record in selling fuel-powered cars.
This poses a major challenge for Chinese automakers because they still lag behind international players from the US, Europe, Japan and Korea in conventional car technology. This is significant because electric vehicle technology will not completely replace conventional vehicles in the foreseeable future.
This suggests that new energy vehicle development should adopt a step-by-step approach in technological terms, and include conventional as well as plug-in hybrid vehicles. Currently, conventional hybrid cars qualify only for fuel efficiency but do not fall into the scope of new energy vehicles. This designation is essential because it would open the way for subsidies that, in turn, would stimulate R&D and help consumers afford these environmentally friendly cars.
There is little doubt that electric vehicles (and ultimately fuel-cell cars) will populate China's roads in the future. How quickly this will happen is a question of how well government and industry respond to consumer requirements and how well the government itself leads the way in its role as a major vehicle buyer.
Indeed, there are only an estimated 10,000 electric vehicles on the road in China today. The vast majority of them are operated by institutional owners in several pilot projects across the country.
Most car manufacturers, including Chinese domestic makers, have showcased alternative energy vehicle concepts and prototypes at auto shows for some time already. For most of them, though, electric vehicles appear to be more a marketing exercise at this point rather than real market offerings. Out in the real world, electric vehicles are practically not available for individual buyers.
This is due to the fact, many would argue, that battery technology is not yet delivering the stable performance required for proper operation of an automobile. These are matters related to energy storage capacity, battery recharging and battery durability.
Technical solutions to these issues are the centerpiece for moving ahead and establishing electric vehicles as a commonly accepted form of transportation. Rightly so. While battery technology occupies the world of engineers, it also assumes a more fundamental significance for consumers because it affects their perceptions about car safety, reliability, and comfort. These are non-negotiable expectations for car purchasers.
Why would consumers want to buy electric vehicles that, in their minds, are hazardous or beset by unreliable performance? Why would they settle for anxiety instead of peace of mind when sitting behind the wheel? To be able to win over consumers, electric vehicles need to respond to basic emotive needs and provide tangible benefits.
Direct experience
When the automobile entered the market more than 100 years ago, it offered quite a few advantages compared with horse-drawn carriages. It was faster, more reliable and durable, more comfortable and "cleaner" (although the meaning of environmental friendly at that time was reduced to the idea of roads without horse excrement). For a higher purchase price, car buyers were rewarded with overall better quality.
The electric vehicle today is generally perceived to offer less to car buyers than the incumbent combustion engine. The driving range is shorter, recharging is uncertain because recharge stations are scarce and the recharging operation takes longer. Maintenance and repair costs for electric vehicles are expected to be higher, along with the purchase price. Green virtues alone can't sell cars.
The consumer's viewpoint has important repercussions for a comprehensive new energy vehicle strategy. Beside the reinforcement of technological research and development activities, the concerns of car buyers have to be addressed.
It is a matter of information and education to explain to the public electric vehicle functionalities and dispel misconceptions related to performance and battery operation. A crucial element is direct product experience, enabling car owners to test-drive electric vehicles and see for themselves. This is why a more aggressive consumer-focused pilot project is a core element of an efficient educational campaign.
In addition, China's idea of leapfrogging technological development and directly moving into electric vehicles lacks the necessary transition process from conventional into new energy technology. That is essential in reassure consumers, step-by-step, with regard to their requirements.
From our market research, we know that Chinese car owners link the capability of developing green technology to the competence of producing conventional technology cars. In other words, the credibility of offering electric vehicles depends on the track record in selling fuel-powered cars.
This poses a major challenge for Chinese automakers because they still lag behind international players from the US, Europe, Japan and Korea in conventional car technology. This is significant because electric vehicle technology will not completely replace conventional vehicles in the foreseeable future.
This suggests that new energy vehicle development should adopt a step-by-step approach in technological terms, and include conventional as well as plug-in hybrid vehicles. Currently, conventional hybrid cars qualify only for fuel efficiency but do not fall into the scope of new energy vehicles. This designation is essential because it would open the way for subsidies that, in turn, would stimulate R&D and help consumers afford these environmentally friendly cars.
There is little doubt that electric vehicles (and ultimately fuel-cell cars) will populate China's roads in the future. How quickly this will happen is a question of how well government and industry respond to consumer requirements and how well the government itself leads the way in its role as a major vehicle buyer.
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