Cleantech Market Intelligence
Early Chevrolet Bolts in the Lyft Fleet Could Be Great Marketing Move
For several months now, pre-production Chevrolet Bolt EVs have been rolling off General Motors’ (GM’s) Orion, Michigan assembly line, and the car is now only about 2 months from being ready for paying customers. However, many of the early Bolts won’t actually be going to retail customers. Instead, they will be offered up to Lyft drivers through the Express Drive rental program.
A Different Model
Given the way Tesla managed to rack up more than 373,000 pre-orders for its Model 3 at $1,000 each, one might wonder why GM isn’t taking a similar approach with the first affordable 200-mile electric car. Unlike the Silicon Valley upstart, GM cannot sell cars directly to consumers but must instead go through its franchised dealer network, so a similar pre-order process would be vastly more complicated, if not impossible.
Even if GM could execute such a program, it’s not at all clear it would work. Tesla and its CEO Elon Musk have built up a remarkable brand in less than a decade, and many of the pre-orders are coming from consumers that want to buy into that brand, just as they buy into Apple when they choose an iPhone over a comparable Android or Windows phone. For many very valid reasons, GM still isn’t taken seriously by many people when it comes to selling EVs, despite the positive reviews garnered by the Chevrolet Volt and Spark EVs.
GM does have a significant time advantage over Tesla and other automakers with the Bolt, and it appears to want to use that wisely with a different sort of marketing approach. Since modern plug-in EVs (PEVs) began hitting the streets 6 years ago, word of mouth and first-hand experience have proven to be very effective means of winning customers. When people actually experience a PEV, they are much more inclined to purchase one.
Getting people to ride in Bolts with Lyft drivers has the potential to provide positive first-hand exposure without having to go to a dealer first. When a customer goes into a showroom having already decided they want to buy a Bolt, they are much more likely to get one. Unfortunately, up until now, many traditional car dealers have tended to steer customers away from EVs and toward more profitable vehicles that they understand better like utility vehicles and trucks. That’s exactly why Tesla insists on selling direct to consumers through company-owned stores, which is not an option for GM or other incumbent OEMs.
If GM can sell consumers on the Bolt before they ever get to the dealership, they may have a much better chance of early success. The mandates to sell zero-emissions vehicles in California and other states will start to ramp up significantly from 2018 onward and the competition will be getting much tougher with the debut of the Model 3; the next-generation Nissan LEAF; and 200-mile EVs from Ford, Hyundai, and others expected.
Navigant Research’s Electric Vehicle Market Forecasts projects global PEV sales of approximately 2.9 million in 2024 with 462,000 in the United States. Through the first 7 months of 2016, Americans have purchased almost 78,500 PEVs, an increase of 20% over the same period in 2015. While Tesla’s financial stability remains very much in question in the coming years as it rapidly scales its production volumes, the company has demonstrated that it is a force to be reckoned with among consumers. GM and the other incumbent OEMs will have to get creative with ideas like the Bolt/Lyft rental program if they are going to both comply with regulatory mandates and maintain or grow their overall sales.