2/2 Peer Review

Fully Electric Cars by Shirish Paramashivaiah

Positioning and Differentiation

Product Positioning refers to the place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors and different from the concept of brand awareness. To position products or brands, companies may emphasize the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through the marketing mix.

Product differentiation is a marketing strategy designed to distinguish a company's products or services from the competition. Successful product differentiation involves identifying and communicating the unique qualities of a product or company while highlighting the distinct differences between that product or company and its competitors.

 

 

Description of the Market

Fully Electric Automobile is the future for automobile industry because the fuels are exhausting and it this rate of automobile usage, we will exhaust the fuel resources earlier than expected. Electric automobile is also good for the environment and this generation is concerned about the environment and saving it for the next generation, so electric automobile does have a really good market and is currently booming. It’s not too far where there would be only electric automobiles on the street, completely getting rid of the gasoline and diesel auto.

 

 

Analysis of current positioning in the market

After a decade of rapid growth, in 2020 the global electric car stock hit the 10 million mark, a 43% increase over 2019, and representing a 1% stock share. Battery electric vehicles (BEVs) accounted for two-thirds of new electric car registrations and two-thirds of the stock in 2020. Even through the global pandemic in 2020 about 3 million new electric cars were registered. For the first time, Europe led with 1.4 million new registrations, China followed with 1.2 million registrations and the United States registered 295,000 new electric cars.

Current Competitors

Tesla, Ford and Volkswagen are the biggest names in the EV market right now.  

Tesla ranked as the most valuable automotive brand worldwide in 2021. With a growth rate over 157 percent in 2021, Tesla was the fastest growing brand worldwide. Most of its models are electric passenger cars, in particular sedans and crossover vehicles, but plans to release Tesla’s first electric light-duty truck in 2022 are underway. Globally, Tesla's vehicle deliveries reached a record 627,350 units in the first three quarters of 2021, up by over 16 percent when compared to sales for the full-year 2020.

Ford has very good hybrid vehicles right now and are going big on EV. Ford is investing $22 billion in electrification through 2025 as part of its plan to lead electrification in areas of strength. The company is electrifying its most iconic products – the Mustang, F-150 and Transit – with many more to come in the years ahead. In addition to offering zero-emissions versions of its most popular vehicles, Ford is harnessing electrification to deliver more of what customers love about them: Performance, capability and productivity.

Volkswagen passenger cars has hit the ground running in the transition to electric mobility. 2020 was a turning point for Volkswagen and marked a breakthrough in electric mobility. Last year, the brand delivered more electric vehicles worldwide than ever before, handing over more than 212,000 electric cars in total (+158 percent versus 2019), including nearly 134,000 battery electric vehicles (+197 percent versus 2019). Volkswagen Passenger Cars launched nine new electric and plug-in hybrid models in 2020. This brought the share of BEV and hybrid vehicles in Europe up to 12.4 percent of the brand’s total deliveries – after 2.3 percent in 2019.

 

Projections for the Market

The US electric vehicles market is expected to reach 6.9 million unit sales by 2025, up from 1.4 million unit sales forecast for 2020, due to government incentives driving EV ownership. The electric vehicle (EV) market was valued at USD 171.26 billion in 2020, and it is expected to reach a value of USD 725.14 billion by 2026. Electric vehicles represented almost 5% of all new car sales in 2020. EVs are forecast to reach over 7% of new car sales worldwide in 2021, a further 66% growth, to exceed 5 million units sold. Approximately 1.3 million EVs were sold in both China and Europe in 2020, four times the EV sales in the US. Battery powered cars will soon be cheaper to buy than conventional gasoline ones, offering immediate savings to drivers, new research shows. Now research from Bloomberg New Energy Finance indicates that falling battery costs will mean electric vehicles will also be cheaper to buy in the U.S. and Europe as soon as 2025. Batteries currently account for about half the cost of EVs, and their prices will fall by about 77% between 2016 and 2030.

 

 

Recommended Position for JGJ Inc.

The top demographic of 2019 EV owners are middle-aged white men earning more than $100,000 annually with a college degree or higher and at least one other vehicle in their household. The average EV owner continues to be male, aged 40-55 years old, with an annual household income of more than $100,000 (2019). So, my recommendation to JGJ Inc. is to somehow workout a deal with the battery manufacturer because battery cost constitutes 70% of the car cost and provide a cost efficient car so that it is affordable to the median earning families too. This would boost their sales comparing the higher costs with their potential competitors.

 

References:

1. Positioning: The Battle for your mind

2. Trends and developments in electric vehicle markets by Global EV Outlook 2021

3. Tesla’s Competitors: The Other Players in the Electric Vehicle Industry by Jamie O’Donoghue

4. EV Consumer Behavior by Fuels Institute