The Growth of the Electric Vehicle Industry, Facilitating and Impeding Forces

This case covers the electric vehicle industry, starting with the history of the electric car and then moving on to the forces driving the twenty-first century automotive industry toward electrification. These include: Government incentives for buying electric and plug-in hybrid vehicles, the economic and political problems related to oil dependency, the effect of oil prices on consumers’ car buying habits, carbon dioxide emission and pollution awareness, and the effect of current and upcoming worldwide emissions regulations. The case then discusses the challenges to mass electric vehicle adoption including: the relatively higher price of certain electric vehicles; consumers’ fear of “range anxiety” – the term for batteries running out of power in the middle of the road; and the narrow demographics of traditional hybrid buyers – which could be mirrored in the demographics of electric car buyers. Other challenges include: competition with internal combustion engines that were becoming more fuel efficient, time limits for government incentive programs, the new competitive market of small, more fuel efficient cars being produced and sold in China and India for less than $3,000, and the question of carbon footprint – the concept that coal is the major source of electricity production in the United States and China, and therefore electric vehicles may simply create a shift in carbon footprint from oil to coal. The case provides specific data about electric car and plug-hybrid brands, price, all-electric driving range and release dates. It also details government programs to promote electric vehicles, as well as current and future mandated miles per gallon for various countries. In addition, it provides data about worldwide and U.S. car sales, how far Americans drive and for what purpose, and psychographics of hybrid vehicle owners.