Five EV/Hybrid Product Marketing Strategies

Demand for Hybrid and Electric Vehicles (EVs) is growing at an ever increasing rate. A Mintel study indicated that sales of hybrids and EVs were up 73 percent in 2012. They forecasted that the number of hybrid and Evs will reach 535,000 units by the end of 2013, which represents a 14 percent increase in sales over 2012. By 2017, Mintel predicts that sales of hybrid and EVs will reach 850,000 units, representing five percent of the total US car market.

Automotive companies are now vying for attention in an increasingly competitive space. Here are five EV product offerings and the associated marketing strategies of the five different automakers.

US Fuel Efficiency Standards Surpass Europe

President Obama's new US fuel efficiency standards may catapult America ahead of Europe by lowering vehicular emissions. The burgeoning US electric and hybrid car market will most certainly benefit from Obama's actions. The President first introduced a fuel standard of 35 miles per gallon (mpg) for 2016 and starting in 2025, American cars and light trucks will have to achieve a standard of at least 54.5 mpg.

President Obama's 2013 Budget Seeks to Increase EV Tax Credits

President Obama's proposed budget seeks to increase tax credits for electric vehicles (EVs). According to the President's proposed budget, EV incentives would increase from $7,500 to $10,000 beginning in fiscal 2013.

Greener Vehicles Growing Cleantech and Providing Green Jobs

In 2011 greener vehicles were one of the driving forces behind the growth of US cleantech. We expect to see the habitual greentech drivers like solar and wind, but in 2011 we also saw tremendous growth in EVs and hybrid cars in the US.

Quebec's Electric Vehicle Incentive Program

Quebec has launched a new program that is designed to increase the use of its renewable energy resources to power ground transportation. Quebec gets almost all of its electricity from hydro power which is a renewable resource. Quebec is the fourth largest hydroelectric producer in the world making electric vehicles a natural fit. Quebec already has the electricity to power at least one million elelctric cars. The province's Electric Vehicles Action Plan will make transportation electrification a centerpiece of Quebec's efforts to develop a new sustainable mobility system.

Ontario Electric Vehicles Incentive Program

As of July 1, 2010, Ontario consumers were eligible for an incentive ranging from $5,000 to $8,500 towards the purchase or lease of a new plug-in hybrid electric or battery electric vehicle. The Ontario EV program also offers non-monetary incentives. These include access to high-occupancy vehicle (HOV) lanes – even if only one person is in the car – and access to public recharging infrastructure at Ontario government parking lots (such as GO bus and train stations around the Greater Toronto Area).

The BC Hydrogen Highway

The Canadian province of British Columbia (BC) built a hydrogen highway system for the 2010 Olympics. The BC hydrogen highway runs between the cities of Vancouver and Whistler. It was designed to showcase zero-emissions hydrogen technology.

Hydrogen Powered Vehicles and Infrastructure in the Province of BC

British Columbia (BC) has announced incentives to increase their support for hydrogen fuel cell vehicles and infrastructure. These programs will help create Canada's first publicly accessible hydrogen refueling station. The initiatives were announced by the Government of BC as a part of its clean energy strategy.

The B.C. Government's Greener Transportation Incentives

The Canadian province of British Columbia's SCRAP-IT® program provides financial remuneration for vehicles with poor fuel efficiency and incentives for greener forms of transportation. Reducing (inefficient) vehicular traffic improves air quality and reduces emissions.

BC's Electric Vehicle Incentive Program

British Columbia’s provincial incentives for electric vehicles and home charging systems begin to take effect On December 1, 2011. B.C.'s new clean vehicle incentive program hopes to grow the sales of clean tech vehicles in the province with point of purchase incentives and supplementary incentive offerings to help build the required charging infrastructure for electric vehicles (EVs).

Canadian Electric Vehicle Incentive Programs

Three Canadian provinces offer incentives for the purchase of an electric vehicle (EV). Ontario was the first province to offer EV incentives followed by British Columbia and Quebec.

PepsiCo's Sustainability Efforts

PepsiCo is committed to protecting the Earth's natural resources through innovation and more efficient use of land, energy, water and packaging. The company's Sustainability Reports detail PepsiCo's governance and economic impacts, as well as achievements in human sustainability, environmental sustainability, and talent sustainability.

Earlier this year, PepsiCo UK produced its second environmental sustainability report. As reported in a MarketingWeek article, the report looked at climate change, agriculture, water use, its products and how the company works with others to drive change within the business.

Since 2005, PepsiCo has also been committed to greening its vehcle fleet. As of 2009, the company had 1,250 hybrid vehicles, which amounted to the second largest non-governmental fleet of hybrid vehicles in the US.

“Our commitment to hybrid company cars is part of our overall commitment to corporate sustainability and reducing our fuel consumption and greenhouse gas emissions,” said Pete Silva, director fleet procurement, PepsiCo.

The company’s sustainability policy includes steadily improving environmental, social, and economic aspects of the world in which it operates. Topping three EPA lists (The Top 25; Fortune 500 Challenge; and “100 Percent Green Power Purchaser”), PepsiCo will continue to add hybrids to its fleet.

Hybrid fleet models include Toyota Prius and Ford Escape and delivery trucks. Pepsi Co. owned, Frito Lay has electric delivery vans and they use hybrid refrigerated delivery trucks in select divisions.

PepsiCo has also worked with GreenDriver to train sales and delivery drivers on fuel-efficient driving techniques.

In addition to sustainable initiatives in its manufacturing of food and drink the company plans to introduce FSC paper-based packaging to its Quaker and Walkers brands within three years as part of its plan to make all packaging renewable, recyclable or bio-degradable by 2018.

For more information on PepsiCo's sustainability efforts click here.

© 2011, Richard Matthews. All rights reserved.

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Survey Shows China More Receptive to EVs than America

Electric Vehicles (EVs) may be taking the world by storm but public acceptance is better in China than it is in America. These are some of the conclusions of a 2011 Accenture survey tiled "Plug-in Electric Vehicles: Changing Perceptions, Hedging Bets".

Globally 58 percent of respondents said they favor plug-in electric vehicles as a long-term substitute for internal-combustion vehicles. In the US only 46 percent of respondents said that they favor plug-in electric vehicles replacing conventional vehicles over time.

Germany is a green energy leader and they are vying for leadership in the electric vehicle market, but only 53 percent of the population see electric vehicles as a viable, long-term replacement for conventional cars.

In Italy, 76 percent of the population surveyed favored electric vehicles as an eventual substitute for conventional vehicles. In China, the number was a staggering 86 percent in favor of plug-in electrics.

Traditional consumption patterns may help explain the difference. In China people appear to be more comfortable with charging their cars at electric fueling stations, while Americans and respondents from the rest of the world prefer charging their cars at home. Some 65% of global respondents stated that they would prefer to charge their vehicles at home as did 77 percent of respondents in the US. In China only 35% of respondents would prefer charging at home.

The Chinese are also more interested than the rest of the world in knowing where the EV power source is coming from. Accenture’s study indicated that globally 45 percent of respondents expressed a desire to know where the electricity to charge their electric car comes from. In the US, only 43 percent were concerned about the origin of their electric power, while in China 62 percent wanted to know where their power came from. This is a critical issue in the sustainability profile of an EV as a car powered by electricity from renewable energy is much better for the environment than EVs powered by the burning of coal

As revealed by the Accenture study, the Chinese are also more forward looking in terms of emerging technology. Although battery exchange may win out over home charging, 62 percent of Americans surveyed would prefer to charge a battery over exchanging it, while 35 percent of the Chinese respondents favored charging over an exchange.

A J.D. Power and Associates Report predicts that China is expected to reach sales of 35 million light-vehicles in 2020 while the US can expect sales of 17 million light-vehicles.

The US may be well positioned to lead the EV revolution, but with its massive domestic market and receptive population, China will give America a run for its money.

© 2011, Richard Matthews. All rights reserved.

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The US is Positioned to Lead the Global Competition for EV Supremacy

The US is well positioned to lead the global competition for EV supremacy. A 2010 McKinsey research firm study suggests that the US is the nation most likely to lead the world in electric car ownership in the coming years.

America is the home of car culture and the nation has a strong domestic auto market. The US has one of the largest vehicle markets in the world and this trend is expected to continue well into the future. According to a J.D. Power and Associates Report, the US is expected to reach 17.4 million auto sales in 2020. Market analyses by energy research firm SBI Energy show that of the 204 million personal vehicles in the US, the average household owns 1.9 vehicles. The viability of the US bid for EV supremacy also derives from the fact the America is the world's wealthiest nation.

According to an SBI Energy report, Electric Vehicle (EV) and Plug-In Hybrid Electric Vehicle (PHEV) Markets Worldwide, in the six years between 2004 and 2009, the number of HEV available models around the world has tripled to 29 and the number of brands producing hybrids has jumped from six to fourteen. In fact, almost a third of the hybrids being offered in the US have 2010 as their first model year.

Global sales of hybrid electric vehicles rose 33% in 2009 with 700,000 vehicles sold in an unfavorable climate that saw the overall auto market plunge worldwide. "SBI Energy's first EV market study entitled, Electric Vehicle (EV) Infrastructure Manufacturing projects North America will hold 20% of the electric vehicle infrastructure manufacturing market by 2014, driven by government incentive programs and the movement toward eco-friendly consumer lifestyles," says Shelley Carr, publisher for SBI Energy. "While government capital is vital, growth also depends heavily on the investment interests of the private sector and the adoption of electric vehicles and plug-in hybrid electric vehicles by consumers."

China is already a leader in the transition from fossil fuel powered cars to electric vehicles. China has a proven capacity for mass producing things inexpensively. Chinese auto manufacturers also have a huge domestic market. A J.D. Power and Associates Report predicts that China is expected to reach 35 million light-vehicle sales in 2020.

China is not alone in its pursuit of global supremacy, Germany and France are also vying for leadership in the EV sector.

Despite serious challenges, America's viability as a global EV leader was corroborated in a study that says the US is the most likely to spearhead a movement toward electric cars from gasoline-driven cars as a means of mass transportation. This is the finding of a research index from McKinsey & Company, a global consultancy firm.

McKinsey’s electric-vehicle index gauges nine variables including consumers’ favorability toward electric cars, a segment where America ranks highly. The US ranked first in the electric-vehicle index ahead of France, Germany, China and other Western European countries.

America is in a competitive position due largely to government support of EVs. In 2007, Congress set aside $25 billion in Department of Energy low-interest loans to encourage the advancement of alternative-fuel vehicles, including EVs. The DOE has made $8.5 billion in loans to Nissan, Ford, Tesla Motors, Tenneco and Fisker Automotive. President Barack Obama also earmarked another $2.4 billion in grants for battery-makers and other electric-vehicle component-makers in 2009. The stimulus package also included a $2,500 to $7,500 tax credit to consumers who purchase EVs.

These investments have put America in the position to lead the race to be the leader in one of the most expansive economic and technological opportunities of our times. The demand for EVs is sure to keep growing. As this demand grows so will the response from automakers. Nissan and General Motors already plan to have a combined capacity to build hundreds of thousands of EVs in the US by next year (2012).

The growth of EV sales will also positively impact associated industries. Pike Research projects that $61 million will be spent across the US on EV charging equipment during 2011.

This is a boon for American business, not only in terms of the vehicles themselves but in terms of the infrastructure needed to support EVs.

© 2011, Richard Matthews. All rights reserved.

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DOE's EV Oriented Transportation Budget

The 2012 Department of Energy (DOE) budget submitted to Congress includes a 20 page section on Vehicle Technologies (VT), much of which is focused on vehicle electrification. In the 2012 DOE budget, VT finance increases 80 percent from $325 million to $588 million. Charging equipment and energy storage technology are getting the bulk of the financing assistance.

The majority, ($229 million) of the VT budget increase goes towards EV deployment and infrastructure. It will benefit programs like Clean Cities which provides grants for purchasing of EVs and charging equipment. It will also benefit EV charging equipment companies.

Funding increases also include energy storage technology which increased from 94 million in 2010 spending to $188 million in the proposed budget. The VT budget also invests in accelerating cost reduction through more research and manufacturing funding.

© 2011, Richard Matthews. All rights reserved.

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US DOE Supports Electric Vehicles with $184 Million in Grants

Late in 2010 US Secretary of Energy Steven Chu announced that the U.S. Department of Energy will start accepting applications for grants to accelerate the development and deployment of new efficient vehicle technologies. Up to $184 million in grants is available for a wide variety of EV technologies including advanced materials, combustion research, hybrid electric systems, fleet efficiency, and fuels technology.

"[The DOE] awards will help ensure America leads the world in the development of advanced vehicle technologies that support cost-competitive, convenient, and comfortable fuel-efficient vehicles," said Secretary Chu in the DOE press release. "Investments in the next generation of vehicle technologies are laying the groundwork for a sustainable transportation sector in America that strengthens our economy and improves our economic competitiveness."

© 2011, Richard Matthews. All rights reserved.

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Study Finds EVs Better than a Renewable Energy Standard

According to research conducted by Rice University’s Baker Institute for Public Policy, EVs are better than a national renewable energy standard at reducing emissions and cutting oil imports. The study shows that replacing fossil fuel powered cars with EVs in the US would have a better result than imposing renewable energy quotas.

The study says: “The single most effective way to reduce US oil demand and foreign imports would be an aggressive campaign to launch electric vehicles into the automotive fleet.”

The US Carbon Management Policy study concludes that if 30 percent of all vehicles were electric by 2050, that would cut US oil use by 2.5 million barrels a day and cut emissions by 7 percent. A national mandate for renewable energy would cut emissions by only half that amount (4%) over the same period.

This Research also found that a carbon tax would actually end up being more costly in the long run and would not impact oil imports in any significant way.

Government support for EVs is important and so is renewable energy to power those cars. However, renewable energy is not a panacea in the short term. As we transition to green energy, renewables can operate alongside cleaner fossil fuels like natural gas. We can also achieve reduced energy demand through greater reliance on public transportation and more efficient building practices including retrofits.

© 2011, Richard Matthews. All rights reserved.

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GM CEO Calls for Gas Tax Rather than a Fuel Efficiency Mandate

In a June 2011 interview in Detroit News, General Motors CEO Dan Akerson said his company and his industry would be helped, not hurt, if consumers paid higher gas taxes. He suggested that a $1 a gallon increase in the gas tax is a way to encourage buyers to purchase more fuel efficient cars.

The current federal gas tax is only 18.4 cents a gallon, but Akerson said that he would not be opposed to an immediate 50-cent-a-gallon increase to take advantage of recent declines in gas prices. Although he concedes that this would probably make some of his Republican friends "puke," it would do more to help the environment than a federal government mandate of of 60 MPG.

Paul Ballew, chief economist at insurer Nationwide who was formerly a director of sales analysis at GM, said it's always been clear within the auto industry that given the choice between tougher fuel economy standards and higher gas prices, the latter is a better deal for the automakers.

However, it is very unlikely that Republican lawmakers would support such a move. "They're not going to get it though, because that would take a lot of sanity in Washington and we're not going to see that," Ballew said.

© 2011, Richard Matthews. All rights reserved.

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Americans Want Cars to get 60 MPG

According to a survey released on May 16, 2011, a solid majority of Americans want vehicles that are much more fuel efficient. The Consumer Federation of America (CFA) said its survey of 2,000 Americans found strong support for a government mandate of 60 miles a gallon by 2025. As reported in USA Today, “Cars would cost more, but respondents said they'd be willing to pay more as long as the higher purchase costs could be recouped in gas savings in 5 years.”

“Concern about volatile gasoline prices and support for higher standards is driven by the huge and rising bite gas expenditures are taking from household budgets—from less than $2000 in 2009 to more than $3000 this year,” said Mark Cooper, CFA’s research director and energy expert in a press release. “Pain at the pump, along with the country’s oil import dependence, has produced a growing consensus that the federal government should substantially increase fuel economy standards.”

CFA received the data from a poll by Opinion Research Corp, which shows that “62 percent of Americans support a federal mandate requiring automakers to meet a 60 mpg standard by 2025, a proposal the Obama administration is considering,” reports the Detroit News. “The fuel efficiency mandate already is scheduled to rise to 35 mpg by 2016 from 27.5 mpg for cars today.”

Government mandates will push automakers towards greener more fuel efficient vehicles like hybrids and fully electric cars. All the major automakers are already launching hybrid vehicles and fully electric cars are sure to follow. According to the CFA study, the general public appears to welcome the move. "We're talking about changing the trajectory of consumption," Cooper said. "The consumer is ready."

© 2011, Richard Matthews. All rights reserved.

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Find EV Charging Stations with Google Maps

To help make it easier for electric vehicle owners to recharge, Google will display the locations of EV charging stations on its web and mobile applications. Charging stations are nowhere near as ubiquitous as gas stations and this is a barrier to the widespread proliferation of electric cars. Thanks to Google Maps, owners of plug-in hybrids and fully electric vehicles will have an easier time finding charging stations.

Google has been a powerful supporter of greener cars. The search leader is also behind an initiative called RechargeIT, which hosts data about plug-in electric vehicles.

Google is working with the US Department of Energy’s National Renewable Energy Laboratory to add the data to its search engines. The Department of Energy indexes the location of all new electric vehicle charging stations as part of its GeoEVSE Forum.

© 2011, Richard Matthews. All rights reserved.

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