What’s your business plan for using EVs to cut costs and win customers?
Once again, America’s consumers and businesses are getting slammed with pump price pain.
But this time consumers have a technology choice. An electric vehicle (EV) economic revolution is creating a crossroad where consumers and businesses can choose to feed their fossil fuel addiction or buy EVs that cost half as much to operate.
What Is Driving The EV Economic Revolution
How much are you paying at the pump? Imagine paying half of that amount. That is today’s EV economic revolution.
But that is just the tip of the financial iceberg being created by the EV economic revolution. Estimates are that within the next 2-4 years EVs will achieve price acquisition cost parity with comparable fossil fueled vehicles.
In five years EVs are projected to win least acquisition-price leadership as they achieve mass production economies of scale enabled by EVs requiring fewer parts to manufacture.
America’s “Messy” Road Ahead
Make no mistake the American embrace of EVs will be a messy and divisive process. It will challenge your business on how align with customers emotionally divided over EVs’ disruptive technology path.
Americans will divide between those who love fossil fueled cars/trucks, just like they love their family memories, and those who embrace EVs like they did iPhones in 2007.
Americans will divide over the role of government in advancing EV adoption. There will arguments over whether it is electron and molecule companies that are getting greater subsidies. America’s media will portrayed this as red vs blue divide even though “red” people will buy EVs and “blue” people will buy fossil fueled full size trucks/SUVs.
The EV economic revolution will also be a commercial war fought over market share and government policies. Electrons rather than molecules is an existential revenue threat for oil companies and oil states. They will lobby hard to protect to protect those revenues.
Electric utilities sees EVs as a revenue bonanza. But they also see a huge threat to their monopoly positioning if EV owners become voters demanding access to consumer owned solar power that deliver lower prices for EV recharging.
Your Business Choices
Like any technology revolution your business must choose a side. Choosing anything other than going with EVs will eventually be as bad of a decision as choosing BlackBerries rather than iPhone or Android smart phones.
One reason to choose EVs is driven by the reality that oil field expansion will not save the day on pump prices. That is because America is already harvesting lower cost fracking fields. Strong productions levels are still being achieved but at an approximately 1+ million barrels per day lower level than during shale oil’s boom production periods. Production over the next years can be maintained but they will not increase enough to satisfy America’s and the world’s growing demand for oil and natural gas.
In addition, fracking oil drillers have acquired financial discipline. In their explosive growth period the frackers’ mantra was “drill baby drill.” That was a huge win for consumers but those days are now over. The frackers will produce more oil with higher oil prices but with today’s high global demand their incremental increase in production will not dramatically slash pump prices.
EVs Will Drive Business Profits
The EV economic revolution will improve your profitability in two ways. The immediate impact will be in lowering your vehicle operating costs. Today’s EVs, even at their higher acquisition prices, cost less to operate over a vehicle’s life than fossil fuel vehicles. That equation needs to be a major focus for every business with a vehicle fleet. From CFO to managers, the cost cutting focus should be on finding EVs that can replace current higher operating cost fossil fueled vehicles.
Winning customers will be the second EV impact on your business. This one will be a bumpy ride not dissimilar to gaining a vaccination consensus.
But if your business sells to Corporate America then the future is now. Corporate America has embraced sustainability as their marketing and operating future. A lot of corporate greenwashing is going on now but that will end as Corporate America figures out the technologies and business suppliers that can deliver both net zero emissions and competitive prices. Aligning your business with Corporate America’s path to achieving net zero emission is a tremendous revenue opportunity that using EVs will enable.
Selling at retail will require market segmentation to capture EV’s ability to win customers. Your millennial customers will see your EVs and your business as cool. GenZ expects that your business will use EVs and they will move on from your business if you do not. Consumers that emotionally align with fossil fuels may view your EVs as a personal threat to their beliefs and livelihood.
But make no mistake. EVs are now emerging to be a key attribute for winning business competitiveness. Today they are a niche solution. Use this time to figure out your EV business strategy to prepare for the day when EVs will be integral to your ability to win customers and control costs.