“PLUGGING IN” THE CONSUMER: THE ADOPTION OF ELECTRICALLY POWERED VEHICLES IN THE US
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 developing more and more efficient internal combustion engine (ICE). There are several alternative technologies of more efficient vehicle such as, Electric Vehicle (EV), Diesel and Fuel Cells. However, a new standard of source of vehicles power has not been established yet. As the result car manufacturer tend to develop several new alternative power sources. Honda for example, while developing Hybrid Electric VehicleHEV (the Insight) it also develop a fuel cells vehicles (FCV). The purpose of this report is to analyze the business situation regarding the development and marketing of alternative-fuel vehicles in the US and proposing a new product introduction strategy for a hypothetical alternative-fuel car for the period 2012-16.
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History Awareness in electric propulsion of vehicles is on the rise throughout global automobile industry. The revival of interest in electrification is attributed primarily to public concerns about air quality and the world oil crises. Furthermore, the combination of several air and energy regulation caused most major vehicle manufacturers to offer a limited number of electric vehicles. However, none of these vehicles was a commercial success.
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Benefit (Benefit to the customers) Adopting new powertrain technology such as EV and fuel cell, customers will gain benefit such as lower in household’s energy expense, especially when the cost of gasoline increase. For comparison, Nissan Leaf one of popular EV car cost about $2.50 to drive 100 miles on electricity while driving the same distance using gasoline cost $10 to $12, depending on fuel efficiency and the cost of gasoline.1
However, due to battery technology constraint, this benefit requires customers to change their habits In order to increase the driving range such as
1. Recharging their cars daily and planning ahead for long trip. 2. Plan the trip for commuting by choosing the downhill route that will help bring the range back up.
The News & Observer, John Murawski, 7 March 2011, All-electric Nissan Leaf makes Raleigh debut.
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3. Drive smoothly & conservatively using the accelerator, stay at or slightly under the speed limit, brake gradually to draw the maximum energy recapture from the regenerative braking system. Besides the greater range of EV, customers also expect that EV’s recharge time would become shorter. Currently, EV’s recharge time is ranging from 8 hours with 240-volt charger to 20 hours with 120-volt wall outlet2.
Form (The Physical Product) The design of new non-fossil fuel vehicles is expected to be the same as ordinary car. Other expectations are greater range and quicker recharges. Today’s design of alternative-fuel car is not an issue. Nissan Leaf and Chevrolet Volt, two electric cars that available in the market were in “regular car” design. Therefore, customers do not perceive EV as concept cars which are usually come in a weird design for the mainstream customers. While for the fuel-cell car, both Chevrolet Equinox and Honda Clarity FCX also accepted by the customers in term of their appearance.
Technology There is no specific technology that customers need from future...
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