Business Overview of Electric Car - Paper Example

The industry of electric vehicle has two main categories which are plug-in Electric vehicles and hybrid electric vehicles. The industry is estimated to form 3 percent of all the vehicles sales in the entire globe. The growth of the industry has mainly been propelled by the low cost of batteries, cars with over 300 miles, other innovations such as Telsas electric Supercharger network and an excellent public judgment about environmental conservation among other factors. Of all the oil consumption in the United States of America, 70 percent of it is utilized for transportation (Adnan et al 2017). With the global increase in demand for passenger cars, there is also an increase in the demand for oil. The increase in demand poses both a challenge as well as a chance to exploit on the invention of car technologies. Since oil is a scarce resource, there ought to be other sources of transportation fuel to balance the forces of supply and demand. With electric vehicles, the growth of utility rates can be able to be decreased or may be moderated (Husain, 2014). The reason is that electric vehicles usually charge during the night when electricity is produced at very low costs. By bringing an equilibrium balancing in demand for electricity between day and night, electric vehicles reduce the average cost of electricity and therefore the overall costs are reduced. Moreover, electric cars generate a significant number of jobs although it is a bit hard to approximate the total number of employment created reliably. However, an increased number of electric vehicles are likely to lead to loss of employment in the oil industry.

Consumer behavior of Electric Car

Several factors affecting the adoption of Electric Vehicles have been analyzed. Such factors include age, groups and subgroups, income, social class, organizational and household decision making and Culture influences. Since the beginning of the year 2000, electric vehicles have been offered at commercial scales, and a significant number of studies on consumer behavior of electric cars have been issued. However, electric cars can be seen to save fuel (Kieckhafer et al 2016).

According to market analysis, the consumer behavior for the purchase of electric cars is influenced by age and income. Younger adults tend to like and buy electric vehicles. The study has discovered that 55% of electric car buyers range between the age of thirty-six and fifty-five years old. In the same group of people, almost 21% of the group was high-income earners. Also, cultural values are seen to have an impact on the consumption of electric vehicles. For example, the majority of the people who own electric cars are usually those with only one child while only a few who drive such cars have more than one child. Additionally, the level of education and exposure influences consumption of electric cars. The reason is that when the potential customers are given an exposure of the electric vehicles, they usually reduce their anxiety about the reliability of the cars (Gallagher, 2014).

Also, experience with the use of electric vehicles has a considerable positive impact on purchasing. Peoples choices are usually influenced by the behavior of other people in the social circles and social standards which control collective behavior. The study revealed that social implications assume a significant role in the promotion of electric cars as the users of electric cars easily recommend them to their friend and family members and this increases the total sales of the electric cars. The decision to purchase an electric car is normally influenced by the household. If the family member has a positive attitude towards electric vehicles, then the potential consumer is more likely to by the car.

Research Design

The study focuses on research questions which are: what are the factors that affect the consumer purchase of electric cars? What factors have necessitated the increase in the demand for electric vehicles and the price at which it is selling?

Demographic Data

For the purpose of this study, the survey targeted a population of 50 individuals who from different age groups. The table below shows the age distribution:

Age

Figure 1

Age Number of Participants Percentage (%)

19-25 8 16%

26-35 10 20%

36-45 15 30%

Over 46 7 14%

TOTAL 50 100%

The table demonstrates the age distribution of the participants. The highest number of participants were from the age of 36-45 (30%), followed by the age of 26-45 (20%). The lowest number of participants were from the over the age of 46 years with 14%.

Gender

Figure 2

The pie chart depicts the gender of participants. According to the results, the majority of respondents were male representing 56% were males while 44% were females. Therefore the majority of the respondents were males although a significant number were also females.

Implementation of Research Design

The research analysis will be carried out using the mixed method research approach. The reason is that of the availability of both qualitative and quantitative data from the questionnaire. The questionnaire had semi-structured questions. The research questions that the participants were asked about entailed the factors that have affected the purchase of the electric cars, the comparisons of the benefits of electric cars against other cars as well as the causes of demand for electric cars in the recent years (Nykvist & Nilsson, 2015).

The data was collected and analyzed using the mix-method research analysis which is then consolidated and presented to the necessary parties. The parties involved studied the analysis from the study with the results crucial when making their decisions in regards to consumer behavior.

Figure 3

From the above diagram, eight participants in the research who fell between the ages of 19-25 said they would be willing to buy electric cars. Ten participants between 26 and 35 years said they would buy electric cars. The age group 36-45 years portrayed the highest number of participants, 15, who would be willing to buy electric cars. However, with an increase in age above 46 years only 7 of the participants would be willing to buy electric cars.

Figure 4

Figure 4 shows how different income levels influence consumer behavior of electric cars. From the survey, only 5 participants in the income level range 0-25000. With an increase in the level of income, more people would be willing to buy electric as18 participants whose income was above $150000 would be willing to buy electric cars.

Figure 5

21 participants in the upper class-Elite group were willing to buy electric cars, and 15 participants in the upper middle class were willing to purchase electric cars. However, in the lower middle class, only 10 participants were willing to buy electric vehicles. In the working class social group only 4 of the participants were willing to purchase electric vehicles.

Market Decision and Rationale

In the market for electric vehicles, the decision to purchase the cars is influenced by age, income, the city of residence, marital status and social class among other factors. These factors affect the process of decision making about the purchase of electric cars (Shin et al 2014). For example, younger people are more willing to buy electric cars than older people. Also, income levels increase, the willingness and ability to purchase electric vehicles. However, the increase is only up to a certain age and then starts to decline. Moreover, if someone is married, his/her decision to purchase an electronic vehicle can easily be influenced by their spouses. Additionally, the city of residence affects the consumer behavior of electric cars (Lu et al 2016).

Recommendation

The government ought to consider creating awareness about the need for environmental protection as well as the advantages of using electric vehicles. Also, more research should be encouraged in universities and colleges, and the students should be allowed to practice driving electric vehicles.

Conclusion

For electric companies to increase their sales revenue, they should engage in extensive market research on consumer behavior. Such research is also important in deciding the type of electric vehicle to produce about taste and preferences of consumers with different age and income levels (Wang et al 2016).

References

Adnan, N., Nordin, S. M., & Rahman, I. (2017). Adoption of PHEV/EV in Malaysia: A critical review on predicting consumer behaviour. Renewable and Sustainable Energy Reviews, 72, 849-862.

Gallagher, K. G., Goebel, S., Greszler, T., Mathias, M., Oelerich, W., Eroglu, D., & Srinivasan, V. (2014). Quantifying the promise of lithiumair batteries for electric vehicles. Energy & Environmental Science, 7(5), 1555-1563.

Husain, I. (2014). A Global View of Electrified Vehicles.

Kieckhafer, K., Wachter, K., & Spengler, T. S. (2016). Analyzing manufacturers' impact on green products' market diffusionthe case of electric vehicles. Journal of Cleaner Production.

Lu, J., Chen, Z., Ma, Z., Pan, F., Curtiss, L. A., & Amine, K. (2016). The role of nanotechnology in the development of battery materials for electric vehicles. Nature Nanotechnology, 11(12), 1031-1038.

Nykvist, B., & Nilsson, M. (2015). Rapidly falling costs of battery packs for electric vehicles. Nature Climate Change, 5(4), 329-332.

Shin, J., Shin, S., Kim, Y., Ahn, S., Lee, S., Jung, G., ... & Cho, D. H. (2014). Design and implementation of shaped magnetic-resonance-based wireless power transfer system for roadway-powered moving electric vehicles. IEEE Transactions on Industrial Electronics, 61(3), 1179-1192.

Wang, S., Fan, J., Zhao, D., Yang, S., & Fu, Y. (2016). Predicting consumers intention to adopt hybrid electric vehicles: using an extended version of the theory of planned behavior model. Transportation, 43(1), 123-143.

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