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Experts Ask: Who Will Buy Electric Cars?

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author photo by Autotrader October 2010

As a wave of plug-in cars are about to hit the U.S. market, a group of experts at an industry conference in Detroit discussed the various technologies and who the buyers of the new models would be.

The people who purchase a pure, electric plug-in car are likely to be drastically different than consumers who opt for a plug-in variant, said Sherif Marakby, director of Ford Motor Co.’s electrification programs and engineering. “There is no single customer” for plug-ins, he added. Marakby said a pure electric vehicle probably isn’t the best option for someone who drives more than 100 miles daily.

Like other automakers, Ford is hedging its bets when it comes to hybrids and plug-ins. Ford’s gas-battery hybrid models have been on the market since 2004. In calendar 2012, Ford expects to start selling a pure-electric, plug-in Focus along with a plug-in, electric-gasoline hybrid that is currently being tested in the Escape, but won’t carry that name when it arrives. Ford also plans to launch two other hybrids that year, both with gas-battery systems and not plug-ins.

“When one of the technologies takes off, Ford will be ready to go,” said Marakby, who was among four experts on a panel at the Center for Automotive Research’s recent Business of Plugging In conference in Detroit.

Another panel member, John Formisano, retired vice president-global vehicles for Federal Express, said there’s some paralysis among customers who are basically being asked to pick the winning technology for cars. Formisano, now a consultant to carmakers and fleet operators, compared the current plug-in smorgasbord to the Mac versus PC and Beta versus VHS tech dilemmas people faced in past years.

To no one’s surprise, the experts agreed early adapters will make up the first round of buyers for plug-ins and variants.

But General Motors Co.’s Tony Di Salle said the automaker is not just targeting its upcoming Chevrolet Volt at early adapters along with a similar group he called technology adapters, both of which skew male and are more heavily concentrated on the two coasts. GM will also aim the Volt at influencers, who are generally business leaders, and more importantly for GM, at the mass market, said DiSalle, product marketing director for the Volt.

The mass market audience “doesn’t know too much about the (plug-in) space today, he said. “We can educate them on the benefits of electrification.” Chevy is readying a comprehensive ad blitz, with ads touting the system’s benefits and includes a national television buy, a cross-country tour, plus online social media and public relations efforts. “We’ll talk about the new-found freedoms” of charging your Volt at home or work “and the ability to drive gas-free” for most of an owner’s day, DiSalle said.

The final panel member, Michael Brylawski, executive vice president- corporate strategy at Bright Automotive, believes “the critical market driver for these vehicles is not education but word of mouth” and generating consumer enthusiasm. “Customers don’t care about the flavor of the electric (plug-in technology), but the efficiencies.”

Bright, founded in 2008 and based in Anderson, Indiana, offers vehicle battery packs, consulting and plug-in conversions. Last year, it unveiled its concept IDEA work van and the company now has deals with the U.S. Army and U.S. Postal Service. In August, GM’s new venture capital division invested $5 million in the company.

Brylawski said the postal workers who drove the plug-in electric vehicles it provided for testing to postal service “ended their day with a smile” because the vehicles were fun to drive.

Communicating the intricacies of the complicated technologies is no simple feat and could take several years. Consider that three years after Toyota started selling the Prius battery-gas hybrid in the U.S., a majority of Americans surveyed by the automaker either thought the car had to be plugged in or didn’t know. That’s why in fall 2003, Toyota felt the need for ads that specified “you never have to plug it in.

New, electric-only models that do have to be plugged include Nissan’s Leaf, which arrives in December with a sticker price of $32,780, and Ford’s electric Transit Connect at the end of the year, mostly for commercial fleet customers and a price around $50,000. The Volt, which has a gas engine to power a generator when electrical power is drained, arrives next month with a sticker price of $41,000.

DiSalle said Americans still carry around “emotional math” that stemmed from sky-high gas prices two years ago. “People know fuel prices are volatile and they want versatility” in their vehicles.

But as gas prices have eased, Americans have slowly started to return to buying bigger vehicles.

Formisano said the major weakness today for pure electrics is the infrastructure of places outside of the home to recharge. But he predicted people will come around. “Higher fuel prices will drive people to this technology.”

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Experts Ask: Who Will Buy Electric Cars? - Autotrader