Marketing is a strategic process of considering demand to define supply. Tanner & Raymond (2013) indicate that effective marketing involves determining the existence of demand for a product, which would determine whether a company would engage in its manufacturing. The demand for electric vehicles has been on a steady rise across the world. Car manufacturers are shifting their production from fuel-powered vehicles to electric vehicles to curb the rising demand. The main advantage of using electric vehicles compared to gasoline vehicles is that they are environmentally friendly considering that they cut down on carbon emissions significantly. Electric vehicles are considered as a mode of transport for the future considering that they not only aid in advancing transportation but also help in conservation of the environment. On the other hand, distance covered by electric vehicles before they are recharged raises concern, as most of the vehicles can only cover distances of less than 150 kilometers. One of the key questions that has been raised is whether selling of electric vehicles is viable for car manufacturers based on the expected profit margins from this business model.
The objective of this report is to examine the viability of selling electric cars profitably. Tesla, which is one of the best known manufacturer of electric vehicles, has been on the forefront in making profits from the sale of some of its key models. However, the company has experienced a vast number of challenges in previous years slowing down on demand for its electric vehicle models. The rise in demand, as seen in its last financial year, serves as a clear indication of a projected upturn in profitability based on its investment in the manufacturing of electric vehicles. Another company that has enjoyed great success in its investment in electric vehicles is Chevrolet. The company has been on the forefront in establishing itself as a leading manufacturer of electric vehicles, which has helped push demand in Europe and America. To determine viability of selling electric vehicles, it is important to consider several factors that will determine the likelihood of shifting to electric cars.
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Battery Issues
Electric vehicle run on charge stored in batteries with the amount of charge determining the distance that a vehicle is likely to cover without the need to recharge. Most of the electric vehicles in the markets today cover distances short distances with the users expected to plug-in the cars to charge (Serra, 2013). That becomes an issue affecting the viability of electric cars compared to fuel-powered vehicles. Issues with the batteries used for the vehicles are some of the key challenges that car manufacturing companies encounter in defining the viability of marketing and selling electric cars. One such issue is the high cost of replacing batteries in the vehicles in the event that they are destroyed. Lack of innovation in batteries used in these vehicles has created a situation where many of the people opt for fuel-powered vehicles compared to those powered by electricity.
Government Policies and Infrastructure
Governments across the world have enacted policies aimed at encouraging development of electric vehicles as a way of cutting down on carbon emissions. The policies have been favorable for car manufacturing companies, as they have defined their capacity to maintain some form of success in marketing their vehicles. However, an analysis of existing infrastructure to support usage of electric vehicles becomes a key issue of concern for those intending to purchase such vehicles (Serra, 2013). For example, the number of charging ports is limited not only in the United States but in all other countries around the world. Therefore, this means that one may purchase an electric vehicle but may experience challenges in charging the cars due to a limited number of charging ports. That builds on the conclusion that although government policies are inclined towards development of electric vehicles, current infrastructure cannot support a high number of these vehicles in the market.
Convenience of Electric Vehicles
Car manufacturing companies have engaged in in-depth research and development with the intention of ensuring that the models that they develop remain sustainable for the intended users. The main area of research for companies has been how electric vehicles would offer a much higher convenience compared to fuel-powered vehicles. Basically, convenience is determined by whether an individual would be much better after purchasing an electric vehicle or whether he or she would feel much more convenient using a fuel-powered car. Electric vehicles are viewed as being much more convenient considering that they do not have to be fueled a specific distance. However, the contentious issue is that most of the vehicles in the markets today must be charged for a minimum of 12 hours to achieve full battery. That affects the overall level of convenience associated with these vehicles, as they cannot be used at any time, which is the case for fuel-powered vehicles.
Conclusion
An analysis of the current consumer market shows that the demand for electric vehicles is on a steady rise. However, this has not been reflected on the viability of these vehicles considering that electric vehicles introduce a wide array of issues that may not have been considered by car manufacturers. Some of the key issues that have been highlighted as part of this report include battery, lack of infrastructure, and notable inconveniences associated with such vehicles. These issues affect the need for consumers to focus on electric vehicles compared to fuel-powered vehicles. That shows that although the demand is likely to increase in future, companies need to adopt a mixed business model focusing on electric and fuel-powered cars.
References
Serra, J. V. F. (2013). Electric vehicles: technology, policy and commercial development . London, UK: Routledge.
Tanner, J. F., & Raymond, M. A. (2013). Chapter 10: Gathering and Using Information: Marketing Research and Market Intelligence. In Principles of Marketing 2.0 . New York, NY: Flat World Knowledge, Inc.
