In real life, I am a passionate motorcyclists. In fact, I have just come back home from riding on the highway 1 from San Francisco to Half Moon Bay. I also commute 60 miles daily on my Aprilia Shiver. I love the freedom a bike provides me with, the sound, the speed, etc.
But, I have never done a lot of research on the motorcycle industry. In contrast to the driving experience the industry itself is rather boring and traditional. The exciting part is, there are many electric motorcycle firms trying to change that (there are actually more electric motorcycle startups than electric car startups). The sad part is that the chances of success are very slim for most electric motorcycle firms. Why? They haven't found their customer yet and it surely is not today’s rider, the traditionalists.
Recently, I read an article by Visordown explaining why electric motorcycle startups are destined to fail. While I like the article, I felt that the reasoning is incorrect and proofs that even motorcycle industry insighters do not analyze their potential customers enough. Two things stroke me specifically: First, why do the guys from Visordown publish an article on New Years Eve (joke aside) and this quote:
It's as if they don't realise they’re already taking on a massive task in persuading motorcyclists – who are largely traditionalists that shun change – to shift to electric power. It’s a big and bitter pill for many to swallow, so it needs to be sugar-coated, not rolled in wasabi.
Disrupting automotive through adaptation of technology business model - How to attract MILLENNIALS (2/2)
In the prior article I wrote about the 3 reasons why car ownership is dying. Car leases are already the most popular way of "purchasing" a luxury and electric vehicle (EV). First, I documented why millennials/younger customers are more likely to lease. Second, I described why technology changes can lead to reduced interest in buying. Finally, I tried to proof that smartphones have given users the ability to experience freedom without owning a car.
These 3 points lead to an assumption: GenY, as the second largest car buying generation, is leading the ownership disruption in the car segment. They buy fewer cars per 1000 citizens, have the highest % of leases and have different expectations for cars (in terms of technologies and features). How can car manufacturers attract GenY and bring driving back?
Lets take a look outside the car industry. How are technology firms attracting young customers? The smartphone market, like the car market, has taken a hit in the last few years. The handset replacement cycle has slowed down significantly. It is the slowest since the introduction of the iPhone in 2007. In 2014, 143 million mobile phones were sold in the United States (-15%). Of them ~90% were smartphones. 2007 users upgraded their phones every ~19 months; today they upgrade every 26+ months.
Disrupting automotive through adaptation of technology business model (1/2) - 3 Reasons why car ownership is dying
In the US 28% of cars are leased. While it is uncommon to lease inexpensive vehicles and family cars, close to half of all luxury cars are. That percentage is only higher in one other car-segment: electric vehicles (EVs): In the first 3 quarters of 2015 75% of new EVs have been leased!
The most common explanation is that EVs are still too expensive to buy. Another popular reason is that customers do not trust the durability of electric powertrains and lithium-ion battery technology. Finally, customers claim that driving range might be an issue and thus prefer leasing over buying (more on my thoughts on driving range anxiety)
All 3 reasons play a major role. All of them have been researched by J.D. Power back in 2010. However, they don’t sufficiently explain the high lease rates among EV customers today. Here are three insights why car leases are 3-4x more common in the EV segment and why car ownership is becoming rare among young customers.
1. GenY (Millennials) Adapts New Purchasing Habits
Sini Ninkovic analyzes the EV market and its customers since 2012. He helped bringing BMW's i3 and i8 to market and currently works as Product Planner for Lucid Motors.