Published: February 22, 2022, 11:20Sofia Donaldson, responsible for Accenture’s business area Automotive and Mobility. Two out of three car buyers put sustainability first and they are also willing to pay more for a car that is powered by other than fossil fuels. It shows a report from Accenture. – It is time for the car industry to really change now, those who are waiting will fall behind, says Sofia Donaldson, responsible for Accenture’s business area Automotive and Mobility. For many years, the car industry has lived by a number of myths when it applies to sustainability. It has been thought that customers are not really that interested in sustainability, that cars running on new fuels are too expensive, and that classic petrol cars are the key to revenue for a long time to come.Read more: debunk myths about environmental vehicles But they have been wrong. According to a new report from Accenture – where 8,500 car drivers were interviewed in large markets such as the USA, China and Italy – these myths are just myths, and the content of them is basically completely obsolete. Instead, the survey shows that as many as 64 percent of car drivers classify themselves as very concerned about the environment, and this applies to all age groups and all income categories. – This shows that the car companies’ target group is much more sustainability-driven than the industry has realized, says Sofia Donaldson. The report shows that even among consumers who themselves say that they do not care much about the environment, there is a clear majority who would rather buy a car that runs on new fuels the next time it is time for them to change.
Many willing to pay more
The report also shows that very many consumers are willing to pay more for a so-called NEV (New Energy Vehicle) than for a vehicle that is powered solely by fossil fuels. – Developing new fuels and vehicles requires large investments in research and development, but These figures clearly show that there is an acceptance of paying a premium for environmental vehicles and cars that run on new fuels, states Sofia Donaldson. And these investments are needed. The survey also shows that consumers believe that no brand is a market leader when it comes to environmental vehicles. 97 percent of sustainability-conscious customers would not hesitate to switch to another brand to get a more environmentally friendly car. – This is both a whip and a carrot for the industry. Since there is no pronounced leader, it is important to invest, develop good products and spread knowledge about what you offer. We also see that car consumers have a surprisingly low loyalty to brands, so the car manufacturer that has something better to offer has a lot to gain. And vice versa, if you hold back now, there is a risk of losing.Adapting the product range to the environment will also be crucial for future sales, as the report also shows that the myth that petrol cars are crucial for future revenues for a long time to come also seems to be incorrect. Nearly 73 percent of sustainability-conscious consumers say they will prefer a NEV vehicle the next time they change cars, and 54 percent of those who do not care as much about sustainability say the same thing. – Cars powered by alternative fuels are the future, and vehicle manufacturers must understand that they need a clear “roadmap” for what the transition to new fuels should look like.
Five myths about sustainable car purchases that are shattered by the report
Myth 1: Few carers care about sustainability Myth 2: Cars with internal combustion engines are important for future earnings Myth 3: Sustainable vehicles are too expensive Myth 4: Car drivers care more about comfort Myth 5: Tesla is perceived as a leader when it comes to sustainability.
Need for new business models
But it is not only new car models that are needed, there is also a need for new business models. – It is not enough to sell cars, but the future is also to sell services. Not everyone needs to own a car, but everyone needs transport solutions. Car manufacturers must review the entire ecosystem that can be developed around the use of the car, and to become a leader, both new models powered by alternative fuels and new business models are needed.Read more: debunk myths about environmental vehicles At the same time, a transition from the internal combustion engine to other fuels requires the construction of a completely new infrastructure, something that requires political initiatives that may take time to implement. Despite this, Sofia Donaldson believes that it is not time for the car industry to wait and see what happens. – It is definitely not time to hold back and believe that there is plenty of time to wait for political decisions. Car buyers want this now, and as I said, they are no stranger to switching to other brands.Sofia Donaldson does not think it is time for the car industry to wait and see what happens. Sofia Donaldson’s hope is that the report will help the industry to have a clearer insight into consumers’ preferences and that they will realize that this is now the case. – I am pleasantly surprised by the results of this study. I knew that there was a clear idea of sustainability among car buyers, but that such a clear majority want sustainable cars and are willing to pay premium for it, and are even willing to accept that the car may not have the same performance as otherwise, it is gratifying me. There is hope.
Four tips for the automotive industry
Develop the product portfolio. Develop the product portfolio for vehicles that are not powered by fossil fuels, and improve the digital experience throughout the purchase price to meet buyers’ changing requirements.Integrate sustainability. Integrate sustainability into the entire customer experience, not just the vehicle.Change communication. Incorporate brand sustainability, and most importantly, make sure to communicate it.Re-evaluate pricing strategies. Take advantage of the margins in sales and service that arise when customers are willing to pay more for sustainability.