|Type of paper:||Essay|
|Categories:||Technology Energy Automotive industry Strategic marketing|
The concept of producing an electric vehicle (EV) is a fantastic business idea. With the integration of rapidly advancing technology, the company will be able to form a huge base clientele that allows it to surpass competitors in the automotive industry. Electric vehicles will significantly reduce emissions and save money for customers instead of spending a lot of cash on fueling conventional vehicles (Garud & Giuliani, 2013). Fueling through electricity provides significant benefits that are not available within the conventional internal combustion for engine vehicles since EVs often react quickly and are very responsive. Understandably, such cars are more digitally connected than conventional vehicles, and the customer can easily plug in the car for charging (Hawkins et al., 2013). The following morning it will be ready for use. Since electricity is readily available anywhere, anytime, the company will be able to reach even the international markets; thereby, enhancing its performance.
Additionally, shifting from conventional vehicles to EVs can help the country have a tremendous choice for transportation. For instance, the United States consumes approximately 9 billion barrels of petroleum every year (Hawkins et al., 2013). The transportation sector utilizes about two-thirds of the total consumption; hence, overreliance on petroleum makes transportation difficult in case of supply disruption and price spikes. Therefore, the production of electric cars will reduce such threats and conveniently serve many customers (Botha & Robertson, 2014). The paper seeks to critically analyze a new concept of shifting from the production of conventional vehicles to EVs while focusing on the problems and opportunities, analysis of the market, competition, and the innovativeness of the idea in the automotive industry.
Even though electric vehicles are usually very expensive compared to fuel-burning vehicles, the availability of cheaper wind power and solar make the operating cost of such vehicles low; hence easily affordable by the majority of the customers. More imperatively, since electric vehicles contain a high-performance battery with the units connected to the grid that may accumulate a good storage capacity, the companies dealing in utilities can easily negotiate with the car owners to benefit from such resources (Hannan et al., 2014). Such advantages create an opportunity for the companies producing EVs because many customers, including the local and international customers to prefer electricity-fueled cars, thereby increasing their sales. The availability of surplus electricity in the grid will make the price drop significantly; hence customers can take advantage of the cheap charging.
The other viable opportunity for the production of electric vehicles is that it can help remove direct emission because distributing electricity to the chargers is more effective and efficient than the distribution of fuel to the gas stations (Lu et al., 2013). More precisely, a power grid may deliver electricity to the charging stations with little or no losses, while the delivery of fuel using trucks consumes more fuel. Therefore, many customers would purchase EVs compared to the small number, which will go for conventional vehicles.
Another benefit of using electric vehicles is demonstrated during heavy traffic. The conventional vehicles consume a lot of fuel even when they are idling on the traffic. But the electric cars may recover charge through regenerative braking, as they remove the emission from idling (Lu et al., 2013). Notably, the idea of producing electric vehicles not only focuses on the production of sports and sedan cars, but it is currently advancing to deal with any vehicles ranging from buses to trailers and scooters as well as bicycles.
In recent years, electric vehicles have gained popularity in both local and international markets due to the advancement of technology. Such vehicles have surpassed conventional vehicles giving higher fuel economy, charging conveniently at home, sound reduction, low carbon emission, and smooth drive, among other benefits (Lu et al., 2013). Also, the use of electric vehicles does not incur the cost of changing the engine oil. It can also be charged using self-charging devices, including turbochargers and regenerative braking systems. Such overwhelming benefits create a market gap for any company with the idea of producing electric cars. About 90% of the population willing to purchase the vehicles would prefer low-cost vehicles (Nykvist & Nilsson, 2015). More significantly, factors like high-performance, low emission, rising demand for fuel-efficient, and stringent government regulations and rule underpinning vehicle emissions promote the growth of the EV market. Contrarily, other factors such as low fuel economy, serviceability, and high manufacturing cost are expected to hinder the production and discourage the growth of the EV market.
Also, the world EV market has been segmented based on vehicle type and the market region. Depending on the type, it is classified into plug-in hybrid EV, hybrid EV, and battery EV, which includes passenger vehicles, two-wheelers, and commercial cars. Based on the region, the EV market has been analyzed across Europe that consists of France, Germany, Norway, Netherlands, and United Kingdom (Hannan et al., 2014). The other region includes North America, Mexico, Canada, and the United States, while the Asia-Pacific includes Japan, Singapore, and South Korea (Hannan et al., 2014). Finally, the LAMEA region comprises the Middle East, Africa, and Latin America (Hannan et al., 2014). Therefore, the idea of shifting towards the production of electric cars would have a ready market in almost all the regions in the world; thereby, increasing the volume for sale.
It has been projected that the electric vehicle market will reach a tipping point by 2022 when the cost of purchasing EV is at par with the conventional vehicles (Nykvist & Nilsson, 2015). Thus, with the cost of owning any of the two, electric vehicles will be a viable, realistic, and the best option for car owners. Therefore, competition in the automotive industry is expected to increase significantly; hence, a choice to produce electric cars is critical and beneficial in the long-run. Understandably, there is a significant gap between the capacity and the demand in the industry, making electric vehicles a more sophisticated option in the industry. Regarding the current forecast, the number of manufacturers for EVs seems unsustainable. So, shifting to such production requires appropriate plans and a good business strategy to ensure perpetual production and sustainability in the industry. For the company to succeed, it will invest through implementing new business models as well as partnering with other companies with fundamental capabilities.
Generally, every company’s mission, vision, and priority is to ensure customer satisfaction and to serve the entire community. The company seeks to reshape the automotive industry and the community all over the world based on the production of electric vehicles. Since the EVs are cheaper to operate than conventional cars (Nykvist & Nilsson, 2015), the drivers and car owners will have more income to direct to other sectors of the economy. The company will push the automotive industry towards adopting the advanced technology that will enable sustainable business and high reliability on renewable energy, fulfilling the company’s mission. With the vision to be the most compelling in the industry, the company will integrate the rapidly advancing technology in the production of electric vehicles to outsmart competitors (Lee & Tang, 2018).
Electric vehicles are gaining popularity every day. Currently, people are transforming the automotive industry; thereby, shifting towards the production of electric cars across the world with the motive of preserving the environment and saving their money on fuel. Sooner, it will be easy to see the electric car on the road. With the highly advancing technology, there is a significant desire for perpetual innovations in the industry that require additional infrastructure to meet the increasing demand for EVs. According to the new projections, the EVs will account for more than 30% of the vehicles on sale by 2025 (Nykvist & Nilsson, 2015). Fortunately, such predictions allow more innovations and advancement to underpin sustainable transportation.
It is worth noting that producing electric cars does not only benefit the buyers but also reflects a huge gain to the environment. Electric vehicle reduces emission and focuses on clean energy that ensures sustainability in the transportation sector. The manufacturers’ capacity is far below the increasing demand for electric vehicles, which creates the greatest opportunity in the industry. The industry is more competitive; hence, the idea of producing requires a proper business strategy that will outperform competitors in the industry and ensure sustainability.
Botha, M., & Robertson, C. L. (2014). Potential entrepreneurs' assessment of opportunities through the rendering of a business plan. South African Journal of Economic and Management Sciences, 17(3), 249-265.
http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S2222-34362014000300002Garud, R., & Giuliani, A. P. (2013). A narrative perspective on entrepreneurial opportunities. Academy of Management Review, 38(1), 157-160.
https://journals.aom.org/doi/abs/10.5465/amr.2012.0055?journalCode=amrHannan, M. A., Azidin, F. A., & Mohamed, A. (2014). Hybrid electric vehicles and their challenges: A review. Renewable and Sustainable Energy Reviews, 29, 135-150.
https://www.sciencedirect.com/science/article/pii/S1364032113006370Hawkins, T. R., Singh, B., MajeauBettez, G., & Strømman, A. H. (2013). Comparative environmental life cycle assessment of conventional and electric vehicles. Journal of Industrial Ecology, 17(1), 53-64.
https://onlinelibrary.wiley.com/doi/full/10.1111/j.1530-9290.2012.00532.xLee, H. L., & Tang, C. S. (2018). Socially and environmentally responsible value chain innovations: New operations management research opportunities. Management Science, 64(3), 983-996.
https://pubsonline.informs.org/doi/abs/10.1287/mnsc.2016.2682Lu, L., Han, X., Li, J., Hua, J., & Ouyang, M. (2013). A review on the key issues for lithium-ion battery management in electric vehicles. Journal of Power Sources, 226, 272-288.
https://www.sciencedirect.com/science/article/pii/S0378775312016163Nykvist, B., & Nilsson, M. (2015). Rapidly falling costs of battery packs for electric vehicles. Nature Climate Change, 5(4), 329-332.
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