Plugging in the Consumer Case Analysis

1964 words 8 pages
“PLUGGING IN” THE CONSUMER: THE ADOPTION OF ELECTRICALLY POWERED VEHICLES IN THE US

INTRODUCTION
U.S. consumer interest in non-fossil fuel vehicles is relatively positive. There are several issues that American faced about fossil fuel such as pollution, dependency on oil imports, concerns of how long fossil fuel supply will be worn-out and especially fluctuation of foreign-oil prices and the more expensive cost of fuel for American household. Some actions have been taken both by the policy maker such as formed an air pollution control department to reduce smog (in the City of Los Angeles, CA) and passed the Clean Air Act in 1970. Those efforts already reduced the car emission by more than 95%. The car manufacturer also took action by
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As complement of what drivers should change to theirs driving habits, there are also several physical adjustment that has to be made by the customers that purchase electric cars such as installed a $2,200

3

St Petersburg Times, Ivan Penn, 12 February 2011, Nissan Leaf: Trading The Pump for The Plug.

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household charger costs, which can be partially defrayed with a 30 percent federal incentive4. As the conclusion from screening and evaluation, EV could become the successor of today’s car.

BUSINESS ANALYSIS
In November 2009, HEV share is 2.5%. However, consider the large automobile market in the US, 2.5 out of around 750,000 monthly US sales in November 2009 is almost 20,000 unit of HEV. Such volume will attract automaker to develop EV. Moreover, the market share of HEV tends to have positive relationship with the price of gasoline. Additionally, 46% of the customers are willing to buy a PHEV with 2,500 cost premium. Nissan Leaf’s price is 35,200. The price can be offset a $7,500 federal tax credit available for electric cars, bringing the total price down to 27,700. With 46% customers desire to pay $2,500 premium, the price of Nissan Leaf would be $25,200. This price will be comparable to Toyota Prius ($25,800) that already sold more than 1 million units. Therefore, for Nissan Leaf, the obstacle is not the price tag but other factors such as infrastructure and behavior change.

DEVELOPMENT
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