The EV industry is experiencing birthing pains, and manufacturers may be as confused as consumers. While sales of EVs are slowly rising, who are the early buyers? Do manufacturers understand how to market to them? And what role does VC and government funding play in advancing the industry?
Chelsea Sexton, EV advocate and consultant, featured in the movie Who Killed the Electric Car?, relates today’s environment to that of the late 1990s when GM introduced the EV1. “It’s déjà vu all over again,” she said, stating that the industry has again reached the vulnerable “valley of death” between technology development and market acceptance.
According to Katie Fehrenbacher, Senior Writer, GigaOM, “The current public sentiment is trending toward a glass half full. But with the 2012 political backlash against EVs—the VOLT has been politicized—in that respect I’d say that the glass is half empty.” She pointed to the rising tide in Silicon Valley, however, as promising.
Ucilia Wang, Contributing Reporter, Forbes, spoke of the importance of managing expectations. While GM and Nissan didn’t meet their sales forecasts, we need to consider the timing. They entered a new market just as the economy tanked.
Who buys electric cars? According to Sexton, “tree huggers” make up the smallest market. It’s the classic early adopters who want something cool, fast. The overlooked group includes those who love technology. After that it’s the cause-oriented folks. Later will come the pragmatists. Based on their messaging, automakers don’t understand their markets. With the VOLT, for example, the thing that drivers love most is that it’s fun to drive, not that it has a plug. The panelists spoke of Tesla as the single example of a company that’s doing it right, focusing messaging on the emotional experience that buyers want.
Comparing manufacturers, Sexton said that GM & Nissan each picked a particular vehicle. Their commitment is an inch wide and a mile deep, whereas Ford’s is a mile wide and an inch deep. Speaking of Ford, she said, “They have tried so hard to not put this car out there.”
Which EV is most exciting? All three panelists agreed on Tesla. According to Fehrenbacher, “Tesla is one of the only [EV] start-up companies that has made it to certain milestones and is doing really well.”
Regarding pricing, Wong noted that battery prices are falling with deployment, but they’re still too high. In the Ford Focus, for example, the batteries are about a third of the price of the car.
How does VC and government funding impact the industry? Sexton stated, “I would like them to stay away from my playground. We were excited to see VCs become interested in these technologies. But whether it’s investing in a company or developing policy, we still want to seek wisdom in the conversation.” Fehrenbacher added that the problem comes when government money follows VC money. While VCs might expect an 80 percent failure rate, taxpayers cannot afford that.
Sexton went on to say that the single thing that DC needs to do is fix the tax credit, to make things easier for consumers. A point-of-sale rebate would go a long way. She concluded that, if you want a certain type of car call the manufacturers and tell them. Enough calls will make a difference.
– Lucy Sanna
April 23, 2012
Photos by Rikki Ward
The Commonwealth Club of California