At first glance, it appears that adoption of electric vehicles (EVs) in the US is going according to plan. Data from Axios shows that 4.6% of new vehicles registered in the US during May 2022 were electric, compared to just 1.9% during May 2021. Bloomberg’s July report detailing how the US crossed a major tipping point of 5% of all vehicles sold consisting of EVs caused quite a stir, with the report indicating that the country should hit 25% adoption by 2025. That level of optimism is welcome news for auto brands dedicating millions of dollars in R&D and marketing toward rolling out dozens of EV models over the next few years.
This optimism doesn’t come without a few reasons for pause, however. The Bloomberg analysis established trends based on 18 countries that hit the 5% adoption rate prior to the US, all of them located in Europe aside from China, South Korea, New Zealand and Iceland. Given the relative homogeneity of Europe in terms of demographics, income, and EV infrastructure compared to the US, where a single state holds nearly 40% of all EV registrations, the gap that must be overcome in the US becomes evident. Thus far, the available market for EVs represents just a small portion of the population, those that can afford an average price of more than US$66,000.
Auto brands in the US can’t simply count on precedents set in Europe and Asia to predict outcomes here at home
As for price, which is the most frequently cited reason for delaying the purchase of an EV, the IEA reported that at the end of 2021, the sales-weighted average price of US$58,000 for EVs in the US was dramatically higher than in the EU (US$48,000) and China (US$27,000). Couple that with the impressive list of incentives granted by countries in the EU to entice car shoppers to purchase EVs, and it becomes clear that auto brands in the US can’t simply count on precedents set in Europe and Asia to predict outcomes here at home.
Price aside, there are also challenges in sourcing rare earth metals domestically, while relying on foreign assistance is becoming increasingly difficult with geopolitical tensions rising on several fronts. Charging infrastructure has thus far been largely dependent on state and local investment, leaving large areas of the country underdeveloped. But perhaps the biggest challenge to overcome is simply convincing auto shoppers that EVs make sense for their lifestyle, especially within areas of the country where uptake has been slow thus far for any of the reasons previously mentioned.
To boost this effort organically, there is good news on the horizon for U.S.-based EV shoppers. Prices are expected to decline over the next few years as mainstream brands roll out new models, leveraging partnerships and years of manufacturing prowess (in addition to cheaper batteries) to deliver vehicles designed for mainstream consumers. Infrastructure projects are gaining bipartisan support to build out charging stations along major interstate highways in addition to rural and underserved communities around the country. But what should auto brands do in anticipation of these projects making EVs more accessible to a broader swath of the population?
In his seminal work Crossing the Chasm, author Geoffrey Moore builds upon the sociologist Everett Roger’s Technology Adoption Lifecycle, arguing that a “chasm” exists between the technology-obsessed “Early Adopters” and the “Early Majority”, which is the more mainstream segment of the population where innovations take off and become central to everyday life. Given the current 5% adoption rate of EVs and their price points, it’s clear we’re still in the Early Adopter phase. Still, as prices drop and infrastructure improves, there are several steps auto marketers can take to prime the market for the Early Majority.
Consumer education
The next wave of EV adoption from the Early Majority will occur in areas outside of places such as San Francisco’s Bay Area where Early Adopters and EV enthusiasts tend to flock. This will require a highly coordinated effort from auto brands, dealers, and marketers. One way to execute from a digital video perspective could be to incorporate elements of Tier 1 and Tier 3 messaging within the same creative unit, detailing the features and benefits of EV ownership via brand-focused video messaging, while adding additional content around fulfillment and in-person consultation via local dealer maps and inventory feeds. Incorporating expert content from endemic auto sites is another proven method of gaining credibility, pushing out valuable information that a shopper would otherwise need to gather on their own. Connecting the dots between the “why” of ownership through educational content and the “how” through dealership expertise will help Early Majority shoppers bridge the significant knowledge gap that currently exists.
Risk mitigation
The Early Majority consumer is one that is more pragmatic than the Early Adopters, who don’t mind dealing with product bugs or fixes so long as they have access to the latest tech. Early Majority shoppers want complete solutions, those that are ready to use “off the shelf”, which is not quite where EVs reside today (which is why many of these shoppers may consider hybrids as a bridge vehicle before they buy a battery-electric only vehicle). Digital video featuring owner testimonials, trusted social influencer content, fuel savings, or mileage calculators would go a long way to assuaging their feelings about taking on risk.
Perhaps the biggest challenge to overcome is simply convincing auto shoppers that EVs make sense for their lifestyle
Cashing in brand equity
While Tesla currently owns a dominant position in the EV space by virtue of its leadership position with Early Adopters, the opportunity for well-established brands to capture market share with the Early Majority is massive. For starters, they are known entities, with most shoppers familiar with a few models, local dealerships, marketing, or perhaps even as former owners. That brand equity will resonate with the Early Majority, who want to deal with brands with proven track records of success. The importance of a strong dealer network cannot be understated, as well. Having a trusted, local automotive expert in their community will provide these less experience EV shoppers a consultant to reach out to should they have any questions about charging, financial incentives, range, and any other concerns as they arise. This is a major strength for established brands to leverage over the slew of EV start-ups that have emerged over the past few years.
In summary, this is an incredibly exciting time to be involved in the electrification of America’s fleet of vehicles. As the industry moves into the next phase of adoption, it will be very different than the first, and a strong connection between national brands, local dealers, and marketing partners will ensure that the Early Majority is well served.
About the author: Jim Johnson is Vice President of Account Planning & Lead of Industry Solutions —Automotive at VDX.tv
