Cars have always been an important part of the American dream, as people see them not as objects, but as something that they can relate to on a personal level, sort of like an extension of their identity. And the “American way of life” has evolved along with the people, technology, and the global shift in ideologies. Hardcore and historic automobile manufacturers like Ford are changing their way of business to cater to this “new” and “updated” American dream that the millennials and the Gen-Z of the country aspire to.
Take the F-150, for instance. It’s one of the most successful trucks ever made in the history of the automobile, and even though rival companies like Chevy and GMC tried the same thing, nothing came close to beating the legacy of the F-150s. The automobile’s engineering is indeed an important factor for this huge success, but the way it’s positioned played a crucial role in the success of this line-up. Fueled by the company’s mantra – “Built tough”, people of America saw the truck as an embodiment of the ideals they believe in, a part of the American dream. The mechanics or the engineering of the car, such as smooth riding experience, durability, range, versatility, affordability, power, etc., simply complimented the core mantra, making F-150s a huge success among the people of America and for the company that made it – Ford!
Fast forward to the 21st century, electric versions of the F-150s are launched in the American market. As one of the top automotive tech solutions providers, we couldn’t stop but wonder, are EVs the next F-150s? Are people ready to make the shift toward a greener and cleaner way of mobility? If so, are the manufacturers ready to capture this new, renewed market?
Embrace the new wave: The future of the automotive industry
A global report finds that by 2026, half of the current brands’ revenue will come from products and services that haven’t been created yet.
This begs the question, how long before the current market and the technology that drives it becomes completely obsolete? As the volatility of the market increases, consumers across various segments will feel the pressure to make the shift, and taking the current scenario into account, the change will happen gradually, but inevitably.
The question is what can/should the manufacturers do to make this transition smoother and make it work for them? The most practical thing for the manufacturers to do is to respond to this change rather than react to it. To land on the top by the end of this shift, manufacturers need to embrace the needs of the new consumers and focus on building resiliency and expanding their capabilities across different verticals. The opportunity for the organic growth of the organization must be prioritized, and manufacturers should step out of their comfort zone to identify such areas where they can grow.
Automobile manufacturers of the modern market are envisioning a future where mobility is a concept that’s fundamental to our society, and the idea goes even beyond that. For instance, many technology companies are hiring philosophers to make technology more inclusive, safer, and ethical. Recently as autonomous cars started trending on the internet, the driver, i.e., AI is put under pressure when it is presented with a no-win scenario. The trolley problem, famously known as the convo-starter amongst philosophers, is opening different dimensions to the scope of AI (Artificial Intelligence) and ML (Machine Learning) in automobiles.
This can change the way self-driving cars are viewed in the market, and as they crack the code for such complex, “human” problems, these innovations will soon be a reality in the market. So, digital transformation in the automotive industry is no longer an if but when, and manufacturers need to align their core strategy towards this bigger picture.
Where does the US stand in the global EV race?
Tesla put the US EV market on the map, changing the way consumers saw automobiles forever. The company dominated and is continuing to dominate the US automobile market, but reports find that as other players enter this market, the dominance of Tesla has reduced in the last quarter of this year. Though there is a soft spot for EVs, the sales in America are still lower than in other parts of the world. China is currently leading in the sales of EVs, as they sold nearly 1.3 million units in 2021 which was around 328,000 that year in the US. The sales in Europe are also a lot higher than the sales happening in the US.
Market experts attribute these relatively low numbers to various factors. For instance, many traditional consumers still feel that Electric Vehicles are not affordable and have serious disadvantages over conventional vehicles or Internal Combustion Engine vehicles. But as gasoline prices increase, and the vision for sustainability becomes serious among both consumers and manufacturers, these perceptions about Electric Vehicles will change real soon.
Another major reason for low sales in the US is the manufacturer’s dependence on the battery production market which is heavily concentrated in the Asian markets. This geographical disadvantage brings in extra costs like logistics, outsourcing, manpower, skill, time, etc., ultimately increasing the cost of Electric Vehicles. This is also one of the main reasons why China is leading the global EV race.
To make up for these disadvantages, manufacturers need to think beyond commuting or transportation when it comes to electric vehicles. They need to think of delivering an experience to their consumers. To help consumers view electric vehicles as a part of their lives, manufacturers can leverage the digital medium and navigate the disruptions that the industry is experiencing. Governments should also extend their support by revisiting their guidelines and legal framework to facilitate the country’s move towards a greener future, a better future!
Electric Vehicles are now an integral part of the American dream! We are in a transition period, and everyone has to play their part to benefit from this transition. In the next few years, the Electric Vehicles market is expected to reach a massive $1.4 trillion, and this opens up opportunities for automobile manufacturers, OEMs, dealers, suppliers, distributors, and customers too! As the global conversation for energy alternatives gets serious, the onus is on us to reinvent the traditional way of doing things & drive digital transformation in the automotive industry. But we also have to understand that there are many fundamental forces in play, impacting such huge aspects of our lives, so we have to navigate toward the future more carefully and with expertise.