Notre Dame de Namur University
This paper was prepare for BUS 2300-09 Marketing Planning and Analysis taught by Joanna Jen September 30, 2014
Since the plug-in hybrid electric vehicles (PHEV) and all-electric vehicles (EV) have been introduced to the world, the number of consumers and the demand for recharging station is likely to rise. Many automakers are starting to produce new model of hybrid vehicles or EVs. Nowadays, the automobile market is highly competitive. Consumers have a variety of choices to buy a car. Because of the high cost and the recharging problems, the majority of consumers are still not interested in purchasing a PHEV or EV. This paper analyzes the pros and cons of electrically powered vehicle and the options for making people switch from gasoline vehicles with ICE engine to EVs. In conclusion, the paper provides recommendations for the firms to stimulate demand for hybrids and electric powered vehicle.
The PHEV and EVs are fuel-efficient and low to zero emissions cars. The first affordable and reliable hybrid electrical vehicle is the Toyota Prius. Since then this technology has been widely developed and new PHEVs with higher electric ranger and shorter recharging time are stated for launch such as Honda Insight, Ford Fusion, etc. High technologies are used in making a PHEV or EV; however, only environmentally conscious consumers are interested to switch to fuel efficient cars because most people are stick to their original life style. According to the case study, driving a PHEV has pros and cons. First, PHEV save money from the fuel cost. It takes two to four hours to charge using a dedicated 220-volt line and six to eight hour using a 110-volt line. The average cost of electricity ranged from $0.04 to $0.33 per kilowatt-hour and off-peak hours could be lower. Therefore, that is less than a dollar to fully recharge a vehicle. Second, ICE engines which ran on gasoline are inefficient; only 13 percent of the energy from the fuel putting in the tank gets used to move the vehicle. Emissions from automobiles also results in problems such as air pollution and global warming. Moreover, the supply of crude oil will eventually run out. These factors show that switching from ICE engines to low emission and fuel-efficient PHEV or EVs is unavoidable in the future. However, a plug-in car concept is still not widely adopted by the U.S. population. This is because many PHEVs or EVs have a small range of mileage in the electric power mode. If people drive more than 50 miles per day or go for a long trip, their vehicles will need to be recharged. Recharging station in not common to discover in the city because the cost is too high. Moreover, the Li-Ion battery is heavy and expensive, and there could be a risk of overheating since the car generates heat while running. In addition, the advantages of driving PHEVs and EVs are not distinct. The government should encourage people to drive a low-emission vehicle by providing more benefits for PHEV and EV drivers.
There are still a group of people can be benefited from the limited range of mileage of electric vehicle. The main purpose of a vehicle is commuting to and from school/work on a daily basis. If a person’s school or workplace is just a few miles away from home, he can plug in and recharge his vehicle at home at night time and it will have sufficient energy for next day’s short commute. PHEV would be a good choice for senior people who have less outdoor activities and those who drive less than 40 miles per day. They may never visit a gasoline station if they own a PHEV or EV.
Next, people who live in urban area but not major city like New York may have preference of having a PHEV. For example, Las Vegas is small but urban. It doesn’t…