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The National Drive Electric Week "Bump": Why Do Electric Cars Sell Better in October?

Kirk's picture
 National Drive Electric Week “Bump”
Why Do Electric Cars Sell Better in October?
What happens when consumers experience all of the available plug ins together, at once, in one place? As simple as that concept sounds, accomplishing that feat is much more difficult than you might imagine. But evidence compiled by Plug In America Board President Richard Kelly suggests the market impact is potentially astounding.
 
credit and link to driveelectricweek.org
Category marketing is old hat. When marketing a category, a line of related products are introduced to customers to help them locate the best choice among them. Think of the toothpaste aisle in the grocery store. Find the aisle? Find the toothpaste. Seeing the entire category helps me make my toothpaste choice.
Today's plug ins play an important role for every auto manufacturer related to the category story – stories about their line of cars - each is telling about their overarching and sub brands. By placing plugs ins within their product line alongside their other vehicle offerings, they set a series of important markers for consumers - they demonstrate innovation, technological excellence, and commitment to sustainability. Customers may or may not choose the plug in, but having that car as part of the broader brand story helps deepen the customer relationship. And for good reason – the plug ins are among their very best cars.
A number of automakers have reported on the success of this strategy in garnering conquest sales; plug ins bring new converts into showrooms. We also understand that for every plug in sold, each vehicle is probably selling many times more traditional cars simply because they are so effective as part of a category outreach strategy. The strong evangelism of plug in drivers helps on this count - what better introduction to a showroom than via a satisfied (albeit plug in) customer?
But plug ins are not simply a category related to a particular manufacturer's overall brand strategy. Plug ins are a category by themselves. Yet plug-ins as their own category is a concept that is only just starting to exist. Typically, vehicle data is compiled at the "light duty vehicle" level, and then by body style (SUV, sedan, etc.). Some organizations have taken the step to break out energy source (The US DOE, NADA). But much of the high-level information used by auto executives for planning may not break out plug-ins; and when something is not documented for corporate planning, it doesn't exist. Finally, few executives likely understand that customers may be walking into showrooms looking for cars powered by electricity; they may lump the PEV segment into the "high-mileage" car buyer segment and may incorrectly conclude that these buyers will be attracted to a traditional hybrid.
 
Plug ins are often not broken out from larger segments
The idea that plug ins are best experienced in comparison to each other is poorly understood in our field, and for good reason. Individual companies are reluctant to show their plugs in alongside their competitors, and we are unaware of any national campaigns aimed at systematically introducing the entire range of plug in electric vehicles to consumers except for two - National Drive Electric Week and Plug In @ Work.
We'll have data on Plug In @ Work later this year (thanks to our partnership in the Bay Area's Experience Electric Campaign), but at least some on National Drive Electric Week's impact on sales paints a compelling picture. Richard Kelly has plotted the monthly sales pace for plug ins each year since they were introduced. The story contains some familiar features for the auto industry - sales peak in the fall and dip precipitously after the beginning of the year.
“The weekend of NDEW set a new record for rebate applications. Most buyers submit the rebate app within a day or two of purchase. Dealers reported a rush of sales leads after NPID events.”
Yet when the line from National Drive Electric Week each year is drawn - beginning with 29 cities in 2011 and heading north of 120 cities this year - the potential category impact of the event begins to become clear. After the seasonal January dip, NDEW essentially serves as a new floor for plug in sales for the remainder of the year. At least until the next NDEW, at which point a new floor is drawn.
Reports from the field corroborate the impact. The organization managing the California rebate reported that September 2013 (the month for NDEW 2013) was a record month for PEV sales, as measured by CA PEV rebate applications. The program manager at the time stated, “The weekend of NDEW set a new record for rebate applications. Most buyers submit the rebate app within a day or two of purchase. Dealers reported a rush of sales leads after NPID events.”
The impact is even more interesting when compared to the monthly October sales data for all vehicles. While October PEV sales have jumped 12%, 23%, and 19% each year that we've held NDEW, total October auto sales have actually dropped twice during the same period. PEV sales are decoupled from general auto sales trends during the period and are strongly positive versus either unchanged or negative for light duty vehicle sales as a whole.
Plug ins are a category. And when the category is introduced as a whole, it impacts consumers and permanently affects sales. So what do you think - is National Drive Electric Week affecting the national sales cycle for plug in electric vehicles?
Figures
 
 
Chart Sources
Light vehicle sales data: Bureau of Economic Analysis, https://www.bea.gov/national/xls/gap_hist.xls, Table 6, Column C
PEV sales data: InsideEVs Monthly Scorecard, http://insideevs.com/monthly-plug-in-sales-scorecard/

What happens when consumers experience all of the available plug-in vehicles together, all at once, in one place? This is one of the concepts behind National Drive Electric Week (formerly National Plug In Day). As simple as it sounds, evidence compiled by Plug In America president Richard Kelly suggests that these volunteer-driven events have a big impact, boosting plug-in vehicle sales by up to 24 percent in an otherwise flat month for car sales generally.

395 Photo Credit: State of Vermont, 2013 Event

Category marketing is old hat. When marketing a category, a line of related products is introduced to customers to help them locate the best choice among them. Think of the toothpaste aisle in the grocery store. Find the aisle? Find the toothpaste. Seeing the entire category helps us make our toothpaste choice.

Today's plug-ins play an important role for every auto manufacturer, related to the category story: each is telling stories about their overarching and sub-brands. By placing plugs-ins within their product line alongside their other vehicle offerings, they set a series of important markers for consumers, demonstrating innovation, technological excellence, and commitment to sustainability. Customers may or may not choose the plug-in, but grouping that car within the broader brand story helps deepen the customer relationship. And for good reason: plug-ins are among their very best cars.

A number of automakers have reported on the success of this strategy in garnering conquest sales; plug-ins bring new converts into showrooms. We also understand that for every plug-in sold, that vehicle is probably selling many times more traditional cars simply because they are so effective as part of a category outreach strategy. The strong evangelism of plug-in drivers helps on this count. What better introduction to a showroom than through a satisfied customer?

But plug-ins are not simply a category related to a particular manufacturer's overall brand strategy. Plug-ins are a category by themselves. Yet plug-ins as their own category is a concept that is only just starting to exist. Typically, vehicle data is compiled at the "light duty vehicle" level, and then by body style (SUV, sedan, etc.). Some organizations have taken the step of breaking out energy source (The US DOE, NADA). But much of the high-level information used by auto executives for planning may not break out plug-ins; and when something is not documented for corporate planning, it doesn't exist. Finally, few executives likely understand that customers may be walking into showrooms looking for cars powered by electricity; they may lump the PEV segment into the "high-mileage" car-buyer segment and may incorrectly conclude that these buyers will be attracted to a traditional hybrid (with no plug).


396                                                                      Plug-ins are often not broken out from larger segments

The idea that plug-ins are best experienced in comparison to each other is poorly understood in our field, and for good reason. Individual companies are reluctant to show their plugs-in alongside their competitors, and we are unaware of any national campaigns aimed at systematically introducing the entire range of plug-in electric vehicles to consumers except for two: National Drive Electric Week and Plug In @ Work.

We'll have data on Plug In @ Work later this year (thanks to our partnership in the Bay Area's Experience Electric Campaign), but at least some on National Drive Electric Week's impact on sales paints a compelling picture. Plug In America president Kelly has plotted the monthly sales pace for plug-ins each year since they were introduced. The story contains some familiar features for the auto industry. Sales peak in the fall and dip precipitously after the beginning of the year.

Yet when the line from National Drive Electric Week each year is drawn - beginning with 29 cities in 2011 and heading north of 110 cities this year - the potential category impact of the event begins to become clear. After the seasonal January dip, Drive Electric Week essentially serves as a new floor for plug-in sales for the remainder of the year, at least until the next Drive Electric Week, at which point a new floor is drawn.

Reports from the field corroborate the impact. The organization managing plug-in vehicle rebates for the state of California reported that September 2013, just after that year’s Drive Electric Week, was a record month for PEV sales, as measured by the Center for Sustainable Energy’s (CSE) rebate applications. “The weekend of [National Drive Electric Week] set a new record for rebate applications,” said Colin Santulli, CSE program manager, “Most buyers submit the rebate app within a day or two of purchase. Dealers reported a rush of sales leads after event.”

The impact is even more interesting when compared to the monthly October sales data for all vehicles. While October PEV sales have jumped 13, 21, and 24 percent each year that we've held National Drive Electric Week, total October auto sales have actually dropped twice during the same period. PEV sales are decoupled from general auto sales trends during the period and are strongly positive versus either unchanged or negative for light duty vehicle sales as a whole.

Plug-ins are a category. And when the category is introduced as a whole, it impacts consumers and permanently affects sales. So what do you think - is National Drive Electric Week affecting the national sales cycle for plug-in electric vehicles?

Figures
 397 398
Chart Sources
Light vehicle sales data: Bureau of Economic Analysis, https://www.bea.gov/national/xls/gap_hist.xls, Table 6, Column C
PEV sales data: Electric Drive Transportation Association Sales Dashboard, August 4th, http://electricdrive.org/index.php?ht=d/sp/i/20952/pid/20952, Combined PHEV and BEV columns

Comments

Emily Lopez's picture

Electric Drive

Well electric drive will be ultimate future of driving as there is resource issue found in fuel or energy level that really a great deal. The ultimate energy sources will be very much helpful for getting a good emission reduction as well as a well maintained mileage to the users. The more you engage other energy source the more you will be having options for preserving the environment from green house effects.
Steve Antonio's picture

Electric car

Especially in winters we have found our several kinds of vehicle problems; in most of the cases we have found that vehicle owners are suffering from several kinds of problems during winters and especially starting and battery problems. Therefore in huge numbers they are switch towards the use of electric vehicle. And also report says that in winter especially during October we have found rise in the selling of electric vehicles; as due to its climate friendly features people are loves to use electric vehicles during winters.
Bill Engelke's picture

Sales of electric cars, article in Slate

Here is another take on electric car sales: http://www.slate.com/articles/business/the_juice/2015/02/low_gas_prices_and_electric_cars_why_tesla_and_other_companies_aren_t_vulnerable.html The author, Daniel Gross, covers many interesting topics in his articles. On the issue of "range anxiety," though, here is what to consider: - Yes, range is something you have to be concerned with on an electric vehicle. However, with an electric vehicle, there is a much longer list of things you DON'T need to be concerned with, including the price of gas, oil changes, hard starting in winter, bad fuel, and maintenance on transmission, exhaust system, engine, fuel system, etc., etc. - Happy LEAF owner and aspiring to Tesla