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Consumer adoption of plug-in vehicles: Finding the bridge to the mass market
Dean Frankel
Research Associate
Lux Executive Summit Americas
March 18, 2015
It is not just about the batteries; consumers need choices within the right vehicle classes
Sales are limited due lack of consumer choice
To go from 1% to 10% adoption, plug-ins need to win the hearts and minds of the right consumer, the bridge consumer
2
A case study – my quest for a suitable, affordable plug-in vehicle
What plug-in vehicles are available to them in September 2015?
While there are at least six plug-in options in their price range – none of them are appealing given their need for cargo space, aesthetics, and prestige
Their buying decision reflects the challenges faced to consumers who are already inclined to be bridge adopters
3
Generation 1: Baby-mobile
+
= Double the baby power
4x increase in cargo volume
Addressing consumer choice – what plug-ins are available today?
Are these the cars to win the hearts and minds of consumers? NO!
Do you know what the top-selling vehicle was in the U.S. for 2014?
Ford F-Series
How about the second best? Chevy Silverado
Followed by the Dodge Ram and Toyota Camry
Well maybe it’s just a U.S. thing? Nope. China’s auto market is booming with Minivans and SUVs growing fastest
4
The “out of my league options”…
BMW i8 Tesla Model S
It’s nice… But pricier than the ICE option, and I need more space, range, and options…
I would only drive this car as a second car or if I lived in a golf-cart community…
VW e-Golf BMW i3
The bridge to mass market – increasing consumer choice in the right class is key for driving adoption
Why is this the new vehicle battleground? Price: Industry average sales price is $35,000 (source: Kelly Blue Book)
Range: Average miles per driven per day is 37 miles, but longer trips are desired
What is needed? SUVs are the preferred consumer choice
Second and third generation “premium mass-market” vehicles 5
The second generation class of plug-ins attempts to bridge the gap, but key holes still exist
Automaker are coming out with second generation vehicles targeting the premium mass-market
These vehicles can sell well over 1 million units annually, BUT…
Where’s my sister’s second generation plug-in baby-mobile ?
SUVs
6
100,000150,000200,000250,000300,000350,000400,000450,000500,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Global sales of leading
affordable luxury cars
(units)
Audi A4 BMW 3-SeriesMercedes-Benz C-Class AverageTesla's Model 3 goal
We need choice within the bridge
7
The SUVs are coming, the SUVs are coming… 2016 Mitsubishi Outlander plug-in hybrid
2016 Audi Q7 e-tron
2016 Tesla Model X
2016 Volvo XC90
2016 BMW X5 eDrive
2018 Audi SUV (311 mile range!)
I get it… there’s a gap in the plug-in market, how do I do anything about it?
Auto OEMs Make cars that people want to buy!
• Plug-in SUVs
• Premium mass market $35,000 to $45,000 vehicle with a 200+ mile range
Chemical & Material Recursive decontenting – plug-ins as a test bed for new tech
• Light weighting a vehicle beyond the batteries reduces the need for large packs, improves performance
• Improving electrical efficiency
Utilities Focus on enabling new services for “bridge” consumers and businesses in your region
Hedge against diminishing revenues from energy efficiency and distributed generation
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So what have we learned?
Electric vehicles will take off when you can walk into any dealer, in any geography and have at least two plug-in options in the showroom display
To unlock the potential of plug-ins, the industry needs: More product offerings in key vehicle classes such as premium mass market
Better range unlocked by innovations beyond the battery
Electric vehicle services beyond public charging stations
If the automotive industry is able to make better electric vehicles to get to a 10% adoption rate, it will be a $93 billion battery opportunity in 2025
Utilities can hedge against electricity losses from distributed generation and customer energy efficiency improvements by enabling new charging services
Globally, electricity revenues from vehicle charging will be a $15 billion opportunity
In the U.S., vehicle charging will generate $5.5 billion in electricity revenue
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Lux Research Inc. 100 Franklin Street, 8th Floor Boston, MA 02110 USA Phone: +1 617 502 5300 Fax: +1 617 502 5301 www.luxresearchinc.com
Thank you
Dean Frankel Research Associate – Energy Storage [email protected] +1 917 484 4870