To date, electric vehicles (EVs) have been niche products, so many OEMs have focused their go-to-market (GTM) strategies on a small, tech-savvy segment of automobile customers. Then, just as electric mobility was about to take off and sales were accelerating in several markets around the world, COVID-19 struck.
Now more than ever, a radically new GTM approach is required to win consumer support for EVs, since COVID-19 could fundamentally influence the attitudes of consumers toward mobility. If they have recently experienced clean air in cities, will that make them lean toward EVs? What’s more, a majority of the population is now getting used to online shopping. Will that make consumers more likely to consider buying cars online? And since people now have to avoid crowded spaces, will individual mobility increase after the pandemic ends? Finally, some consumers are avoiding gas stations. Will the ability to charge at home become a purchase consideration for EVs?
Although such questions are difficult to answer, consumers may be more reluctant than ever before to make big purchases, such as cars. Yet the increased public focus on climate change, shifting environmental regulations, and technological advances are making the case for a green-mobility transition and thus for EVs. First, however, the current GTM approach must change, and that will require both OEMs and their partners in the EV ecosystem to change as well.
The challenges ahead
Many challenges for the growth of the EV market lie ahead, but some stand out. In particular, a scalable GTM model for EVs must address new regulations that may influence competition, the customer base, infrastructure, and the business case for and profitability of these vehicles (Exhibit 1).
Exhibit 1
The regulatory environment
In reaction to increasingly tight CO2 regulations and the anticipated sizable penalties for noncompliance, most automotive players have ambitious EV-growth plans: OEMs have announced the launch of more than 600 new EV models by 2025,1 and competition will probably grow as many new players enter the market. Increasing sales of new EVs will be a complex challenge, and OEMs may find it more difficult to make profits if governments reduce subsidies as EV technology advances.
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SOURCE: McKinsey & Company
