What will it take to achieve mainstream adoption of electric vehicles?
Right now, the EV industry is selling only to early adopters. And significant long-term growth (also known as market transformation) will not occur until the mainstream decides to adopt.
In all technology-based industries and markets, the key to accelerating mainstream adoption has been the lowering of perceived risk. The acceptance rate of any new technology is governed by the end user’s perception of risk and uncertainty.
Low Risk Reinvention™ is the process of systematically lowering the perception of risk so that more people feel safe enough to adopt.
Recently, the managing partner at High Tech Strategies analyzed the perception of risk held by potential EV buyers and users. The results of his findings are contained in the following presentation:
Fundamentally, EV adoption is being restricted by the following three factors:
- The EV category “infrastructure” is currently under-developed so the products are perceived as high risk
- Most intangible “risk-reducing” attributes required by the mainstream are missing
- EV suppliers are not following the proven formula that is required for market transformation
These results were presented at AESP’s Electric Vehicle Solutions Lab in Detroit, MI in June of this year. This analysis includes examples of how Low Risk Reinvention™ was used in 3 different industries to accelerate and maintain market transformation with a novel innovation.
How to Accelerate EV Adoption
Low cost and extended range are not the only barriers to widespread adoption of electric vehicles. The perception of risk plays the biggest role in delaying mainstream acceptance. Most industry analysts and observers monitor and/or forecast the reduction of EV prices and performance over time. However, an analysis of adoption factors from related high-tech sectors prove a reduction in perceived risk is actually the primary transformative factor.
The formula that is recommended for accelerating EV adoption is the same formula that has led to the success of any high-tech innovation. Specifically, for electric vehicles, the steps to market transformation are as follows:
- Group customers based on economic value so they can be distinctly targeted
- Enable the development of a supporting infrastructure that helps target customers feel safe
- Continuously redirect and renew the intangible attributes of Electric Vehicles in a way that encourages end-user adoption in your target niche
- Make a convincing case that your technology, product, talent, and commitment are fully aligned with the interests of an EV customer
- Focus on a series of niche market segments
An Opportunity for the Electric Vehicle Industry
The conclusions presented provide EV manufacturers and suppliers with an opportunity to accelerate the transition to a clean-transportation future. Many industry executives expect lower cost and higher performance will deliver mainstream market adoption, and some believe government policy and/or market competition will provide these expected outcomes. But proven results from many different industries suggest that the lowering of perceived risk will be the true driver of EV market transformation.