The electrified-vehicle industry is developing quickly, with recent announcements influencing predictions that all new cars will be fully electric as soon as 2030 in the U.S., only 7 short years away. We continue hearing about factories retooling for battery-electric vehicles (BEVs) as the industry is becoming a hotbed for acquisitions, with extra funding squeezed out of companies to go toward research to get ahead of the curve.
As original equipment manufacturers (OEMs) quickly shift gears to go electric, how can they make sure they get the biggest bang for their buck by ensuring consumers make the transition?
The adjustment has been accelerated due to circumstances such as the COVID-19 pandemic, the spike in gas prices and continued messaging around the dangers of global warming.
Consumers want less-expensive options that help diminish their carbon footprint. But that still might not be enough for them to take the final leap into BEVs. In order to pivot the consumer mindset from gas guzzlers to electric models, OEMs need to align on communication strategies.
Manufacturers need to showcase collaborative leadership in the BEV space by offering fine-tuned co-op advertising programs with reasons to purchase and showcasing encouraging creative content and educational messaging. Content should teach consumers about BEVs, such as how to charge the vehicle, how far the vehicle will go with one charge or whether it’s worth the money based on the particular ’” ’consumer’s financial situation. OEMs need to consider local dealer co-op advertising tactically to push consumers toward the final sale.
Another tactic is slashing sale prices. Doing this makes the switch to BEVs more affordable and attractive to the consumer, especially if the car is less expensive than a newer standard combustion-engine model. For example, Ford recently cut prices by an average of $4,500 to compete with Tesla’s price cuts. This is also in line with new caps on BEV prices to qualify for federal tax credits under the Inflation Reduction Act. Government incentives continue to shape the future of BEVs, offering up to $7,500 through specific qualifications. To stay competitive in the marketplace, price adjustments paired with these credits will be crucial. BEV growth within the next year heavily depends on what manufacturers continue to do to get consumers to make the switch.
However, OEMs can make all the price adjustments in the world, but they won’t make the sale if it’s not being put in front of the right audience. Fortunately, hybrid models provide a great place to start. Although hybrid vehicles didn’t create the same craze upon launch as BEVs continue to have, hybrid owners are a great target market, as their vehicles are already halfway there. Since hybrids have more machinery than conventional cars, they have extra weight, which in turn lowers fuel efficiency.
If OEMs can assure potential customers that BEVs are simply a better investment due to lower net emissions, less maintenance required and actually lower cost over the vehicle’s lifetime, then hybrid owners could be first in line to make the final jump to BEVs.
After the consumer makes the change, it doesn’t stop there; the aftermarket industry is a huge part of BEV adoption. While fuel system parts, engine parts, exhaust system parts, multi-gear transmissions and clutches might be going out, single-speed gearboxes, motor controllers, electric motors and regenerative braking systems are storming in.
As OEMs continue to market incentives to transition to BEVs, aftermarket manufacturers will have to plan for reduced volume of internal-combustion-vehicle parts. If they are going to make a change this big, they need to start incentivizing consumers to make the switch as well.
The truth is, we don’t know what the BEV industry might look like in the future. But OEMs do know what to expect and how to prepare as they continue to offer incentives and rebates. With the lowering of BEV prices starting to gain traction, it’s worth looking at additional rebates and incentives across the entire EV segment.
While lowering the price to get the biggest bang for an OEM’s bucks may sound contradictory, it inevitably leads to more sales, thus generating popularity and continuing the cycle as the BEV industry kicks into high gear.
David McShane (pictured, above left) is vice president and head of the sales and marketing department at the Advertising Checking Bureau.
