David Levine, international business development director, Europe & NA, ITIS Holdings Plc and managing director, ITIS Deutschland GmbH, on how driver behavior is driving change in the automotive industry
There is no doubt that the automotive industry is experiencing major change. Three years ago very few consumers had even heard about electric vehicles. Yet virtually every major automotive manufacturer has announced plans to introduce this new type of vehicle into the market over the next few years. In an industry where change is slow and where products typically take three to five years from inception to launch, this is a remarkable development. What's more remarkable is that a completely new drivetrain platform such as is required typically only happens every five to seven years.
It's no secret that the behavior of the driving population—both those who drive today and those who would normally be expected to drive tomorrow—is changing in ways rarely seen in the past. A US Department of Transport study has reported that Generation Y is driving 37% less than youth of previous generations. Fewer youth aspire to own a car then ever before. Increased fuel costs, rising insurance premiums, environmental concerns and technology that enables an effective decentralized workforce are all behind this change.
In a recent study by US firm HNTB, 63% of respondents believed that rising fuel costs would mean they will no longer be able to afford to drive a car. That means that while historically published fuel consumption figures were little more than the small print on marketing materials, consumers and particularly corporate fleet buyers are putting ever greater emphasis on the cost of running the vehicle.
UK drivers have seen insurance premiums rising by an average of 40% over the last 12 months, with the blame squarely being put on the shoulders of the young, the uninsured (and therefore illegal) driver, and the proliferation of ‘no win, no fee’ legal firms that encourage people to launch frivolous legal action following accidents.
Cynics may argue that people are less concerned with the impact their cars have on the environment and more concerned with the financial incentives governments use to encourage more environmentally-friendly purchases. These are mainly in the form of tax reductions that are particularly sought after by company car drivers.
The electric alternative
Electric vehicles do seem to offer almost the utopian driving experience when placed in the context above. They are fairly cheap to charge—particularly when the driver can make use of off-peak electricity tariffs. They are certainly more environmentally friendly with far fewer emissions, and government subsidies, tax-breaks, and even discounts all serve to encourage take-up of this new driving paradigm.
Of course, electric vehicles are not without their drawbacks. There is the ever-present concern about autonomy (range anxiety) due to battery limitations. Some question driving performance characteristics and, to date, without adjusting for purchase incentives (typically government funded), on-the-road prices seem to be somewhat higher than non-electric vehicles. It is doubtful whether electric vehicles will be cheaper to insure than their more standard counterparts. (For more on range anxiety, see ‘Telematics and EVs: Reducing “range anxiety”’ and ‘Telematics and EVs: Things to do while charging ’.)
Finally, advances in technology have reduced the need for teams to be physically co-located. Cheap broadband, cloud-based collaboration tools and the ubiquitous smartphone have made remote working far more viable than ever before. As driver behavior continues to reflect economic and environmental realities, automotive manufacturers will need to react to their customers’ demands far quicker than before.
David Levine is international business development director, Europe & NA, ITIS Holdings Plc and managing director, ITIS Deutschland GmbH.
For more on EVs, join the sector’s other key players at Plug-In Electric Vehicle Infrastructure Conference & Exhibition Europe 2011 on October 11-12 in Frankfurt or Telematics Munich 2011 on November 9-10 in Munich.
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