At the Detroit Auto Show these past two weeks, many manufacturers have been showing off their new electric vehicles. There is finally some healthy competition in this space as the world’s largest manufacturers are getting involved.
As with any new technology, good branding is the key to quick success. Branding is especially important in the auto business because a car is one of the most important purchases we make. Since the name of an electric vehicle model will have a significant impact on its initial uptake in the market, I’d like to share some of the good, the bad and the ugly of electric car branding.
The Good
Toyota is in a great position in the electric vehicle market even though they have not been as aggressive as Nissan or General Motors (GM). Toyota has the luxury of waiting to see what the competition does because the Prius has been so successful. As soon as electric cars start gaining momentum, all Toyota has to do is come out with a plug-in Prius.
All they have to say is, “It’s a Prius with a plug,” and millions of them will sell. Since “Toyota” is pretty much synonymous with “quality” and “Prius” with “alternative vehicle”, brand equity allows the company to wait for the right moment. When that moment comes, we’ll be seeing plenty of plug-in Priuses on the road because of the Prius name.
The Bad
The Chevy Volt is GM’s big splash in the electric vehicle market. The Volt is a plug-in hybrid, which means that it runs on battery power for about 30 miles and then has a gasoline engine as backup. As long as there is a gas station nearby, you will not end up stranded on the side of the road, just like with a conventional car.
This distinction is important because market research that I have been a part of has shown that the number one concern in the minds of consumers is lack of vehicle range. Given battery storage limitations and lack of infrastructure, consumers are worried about being stranded in the middle of nowhere without a charging station nearby.
When we hear the word “Volt,” we think of electricity. When we think of electricity and cars, we think of being stranded in the middle of nowhere. If those are the word associations that consumers are making, why would GM call it the Volt? All they are doing is selling the car short because it also runs on gasoline. You are no more likely to be stranded in the middle of nowhere with a Volt than with a conventional car. It is going to take a while for consumers to make this realization, so the Volt is going to have a tough time at first because of its name.
The Ugly
Upstart Chinese manufacturer BYD Auto has been making a lot of the headlines lately, especially since Warren Buffet bought a 10% stake in the company. I know the Chinese are not known for product naming, but BYD’s plug-in hybrid name is not bad, it’s plain ugly. It’s called the BYD F3DM. Excuse me? Is that your car or your license plate number?
And in case you are not interested in the BYD F3DM, you could opt for the all-electric BYD E6 instead.
Final Thoughts
Whether you like it or not, branding has a huge impact on consumer decision making, especially when it comes to purchasing a vehicle. It would be nice if we all just purchased the greenest car on the market. But with a $10,000+ price premium for electric vehicles, only the super rich can afford to risk money on an untested brand.
So if you are wondering why Toyota has not been that aggressive in the electric vehicle space, think of how much brand equity they have with the Prius name. If you are wondering why the Volt will take a while to reach its market potential, think of how confused consumers will be about the Volt that also runs on gasoline. If you are wondering why an auto company would name its cars after a licence plate number, don’t ask me. Maybe Warren Buffet would be able to tell you.
