Digitally electrifying vehicle ownership

This is the first in a series of articles by Neal Gorevic and Haven Thompson that looks at electric vehicles and how automakers, as well as other players in the space, are planning/will need to plan on leveraging digital marketing and product development to help drive adoption for electric vehicle purchase and to help manage and support EV ownership.

In 1899 and 1900, electric vehicles outsold all other types of cars, such as gas- and steam-powered vehicles. In 1897, the first fleet of electric taxis was introduced in New York City. Pictured above are several of those electric taxicabs, with the drivers perched on top.

Embracing Electric
It is official: vehicle manufacturers are embracing electric again. More than 100 years since the first fleet of electric taxis hit the streets of New York City in 1897 and a number of mass-produced electric vehicles, including the General Motors EV1, were developed in the 1990s, manufacturers across multiple price points are developing a range of electric vehicles options, including hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and battery electric vehicles (BEVs).

According to automaker estimates, by the end of 2011 General Motors will manufacture 10,000 Chevrolet Volts and Nissan is expecting to have 50,000 Leafs in production. Ford currently offers its Transit Connect in electric and plans to release the new Focus Electric by early 2012. Toyota is planning on expanding its Prius platform to include plug-in hybrid electric models. Tesla’s first four door sedan, the Model S, will come early next year and even BMW is planning to launch a full line of electric vehicles under its new BMW i sub-brand in 2013, to name a few of the manufacturers in the space.

Even as electric vehicle production ramps up, many are wondering whether or not consumers are ready for the shift in driving behavior, vehicle maintenance and support that comes with an electric-powered vehicle. According to J.D. Power estimates, mass-market electric vehicle adoption might not be as close as many in the industry hope. By 2020, J.D. Power projects that HEVs and PHEVs will account for roughly 10 percent of vehicle sales in the U.S., or nearly 1.7 million units, and BEVs will account for less than 1 percent of sales, or 108,000 vehicles. With a projected collective market share of less than 11 percent, many OEMs are interested in understanding and responding to consumer concerns about electric vehicles as they look to increase adoption over the coming years.

According to a recent study by Deloitte, the top four barriers to entry for mass product adoption of electric vehicles in the U.S. are: vehicle price, reliability, costs of charging and convenience to charge during ownership. For many future electric vehicle owners, these are all valid concerns. A shopper searching on Edmunds.com would note the MSRP for a new Chevrolet Volt is more than $40,000, compared to the $16,000 Chevrolet Cruze or the $21,000 Chevrolet Malibu. And while the U.S. government projects massive growth in electric vehicle adoption, there are only 722 public charging stations in the U.S. today, according to the U.S. Department of Energy.

It seems for now, no matter how fast prices for electric vehicle fall or how quickly new infrastructure is built, for many consumers the electric vehicle represents a rather daunting shift in their driving life.

At the root of this perception problem may be the depth of consumer’s familiarity and understanding of how electric vehicles will work within their day-to-day lives and ultimately how they will be better for the environment. In a recent survey, IBM confirmed that while consumers have generally “heard about” electric vehicles, 42 percent of them admit that they know little detail about them. This fact has not gone unnoticed by OEMs and other companies in the electric vehicle support industry who are exploring innovative ways to help increase consumer’s understanding of the lifestyle benefits of electric vehicle ownership, including long-term cost savings, ability to actively track emissions and the global impact of reduced fossil fuel usage. At the core of many of these marketing and product development efforts are digital-native solutions that are designed to empower the customer’s driving and owning experience, build advocacy and support for electric vehicles.

Over the next few weeks, Headlightblog.com will explore a number of examples from vehicle manufacturers and companies developing electric vehicle support technology that demonstrate how digital is being used to bridge the gap between manufacturers and consumers and ultimately grow the electric vehicle market. From enhanced vehicle telematics, to tying your vehicle to the smart grid and rethinking the vehicle ownership support, digital is proving to be a driving force in electric vehicle consumer empowerment. Stay tuned.

Full disclosure: Ford Motor Company is a Razorfish client.

Related links:

• 7 Groundbreaking Electric Vehicles Built Before the 1900s; Gas 2.0, 9.27.09
• Electric and Hybrid Cars: A History, by Curtis D. Anderson and Judy Anderson; 2010
• History of the Electric Vehicle; Wikipedia
• Timeline: History of the Electric Car; Now on PBS, week of 10.30.09
• General Motors EV1; Wikipedia
• Chevrolet Increases Projected 2012 Volt Production Capacity by 50 percent; Car and Driver, 7.30.10
• Nissan Leaf electric car to be built in Sunderland; BBC News, 3.18.10
• Ford Confirms Focus Electric Production for 2011, But Stresses Real (and Increased) Volume in 2012; Ford Focus Electric, 10.23.10
• Toyota Plans 6 New Hybrids for 2012; New York Times, 9.13.10
• Tesla Puts Prices, Delivery Date on Model S; Greentech Media, 3.7.11
• BMW Announces BMW i Sub Brand, Promises Two Cars in 2013; Motor Trend, 2.21.11
• Drive Green 2020 Report; J.D. Power and Associates, 10.27.10
• Gaining traction: A customer view of electric vehicle mass adoption in the U.S. automotive market [pdf]; Deloitte, 6.17.10
• Electric Charging Station Locations; U.S. Department of Energy, Energy Efficiency & Renewable Energy
• Alternative Fueling Station Total Counts by State and Fuel Type; U.S. Department of Energy, Alternative Fuels & Advanced Vehicles Data Center
• IBM Study: Electric Cars Stir Interest But Face Obstacles; IBM Press Room, 1.11.11

Image credits:
Photograph of electric taxis in New York City in the 1890s appears via Gas 2.0; photograph of a Leaf being charged via Nissan; “Electric car parking only” sign via Sacramento Municipal Utility District.