Market Screening of Electric and Hybrid Vehicles

Consumer Trends

The demand for electric vehicles has grown significantly. The total US sales have grown from 558,543 units in 2017 to today’s 1,725,239 units and are expected to grow 83% by 2027. Overall, the US consumer is willing to accept new energy source vehicles. Furthermore, as the national average gas price reached $5.03 in June 2022, compared to $3.23 one year ago, this high fuel price impact the consumer decision process when purchasing a new vehicle and makes them increasingly likely to consider other alternatives to fossil fuel driven car. Government incentives are also a significant factor that pushes the consumer to this market. 85% of the consumers indicated financial subsidies as an essential driving factor when deciding to purchase an electric vehicle (Gabe.S, 2022). 

Meanwhile, the industry also faces challenges as consumer confidence decreases due to the fear of the recession. Research showed consumer interest in buying a new car dropped 5% from January to June 2022. Inflation and disruptions in the supply chain also cause high prices, which result in customer delays in their new vehicle purchase (Gabe.S, 2022). 

Competitive Analysis (direct and indirect competitors)

Two leading companies currently dominate the electric and hybrid vehicle market in the United States, Tesla and Ford Motor (Johnson. P, 2022). The industry leader Tesla holds 66% of the total US electric vehicle market in the second quarter of 2022, with ford in second place, holding 7.8% of the market share. However, apart from the two industry leaders, several other competitors are also in the market. Many previously traditional energy vehicle manufacturers shift their focus to electric and hybrid, such as Audi, BMW, and Toyota (Fischer. J,2022).

The indirect competitors to electric and hybrid vehicles are the traditional energy source and hydrogen fuel cell vehicles. Conventional vehicle manufacturers shift their focus to electric with the government policy to push consumers to the environmentally friendly product. As a result, the gas and oil car market will decline continuously in the coming decades (California, 2020). The hydrogen fuel cell also did not present a significant threat to electric vehicles as its more dangerous and expensive (Baxter, T, 2020).

Conclusion

Electric and hybrid vehicles are a fast-growing market. Major brands such as Tesla dominate the market with a significant advantage. However, the public opinion trends became more favorable to electric and hybrid due to environmental and policy changes. There are still many opportunities for a new or traditional vehicle brand to enter the market, as the potential of this market is far from fully exploited.