The Environmental Protection Agency (EPA) announced a tough new vehicle pollution rule in April that will ensure that electric vehicles make up up to 60% of new cars sold in the US in just seven years — here’s how that could affect electric vehicle sales.
Electric Speak to Ronen Slonim, Principal Data Analyst at complete pathan auto industry customer data and experience platform, on how the new EPA rule will affect auto dealerships, original equipment manufacturers (OEMs), and electric vehicles sold via direct sales.
How will the EPA’s new rules affect direct versus direct selling models? proxies?
Let’s look at Tesla, which uses a direct selling model. Tesla has lowered its prices several times over the past year or so in an effort to compete with the prices offered by dealerships and appeal to a wider audience. While Tesla’s cuts initially led to an increase in sales numbers and a short-term decline in EV sales at dealerships, this method of price cuts to beat dealers isn’t sustainable in the long run, especially when you consider the steady increase in EV purchases at dealerships in the second half. From 2022.
Sales of Volkswagen electric cars jumped 126% during the second half of 2022 compared to the same period a year earlier, and brands like Kia and Volkswagen, which produce higher-quality electric cars at lower price points, can be credited with pushing Tesla to decline. Their prices in the first place.
While adoption of electric vehicles in the United States has been slow compared to most of Europe and Asia, competitive pricing has been shown to increase interest and purchase. The EPA’s proposed rules would open up the market in the United States, providing the agencies with an opportunity to educate the public and increase sales of electric vehicles.
How have OEMs that have delivered electric vehicle sales fared so far?
Although the overall environment is challenging, we are seeing a widening gap between OEMs that offer EVs and those that don’t. Those with EV offerings fare much better than their counterparts without.
Almost all auto brands saw a decrease in the number of cars sold, both new and used, in 2022 compared to 2021. However, not only did Kia see a massive 33.5% increase in sales in the wake of the pandemic, but it also saw a 3.5% increase in 2022 sales. compared to 2021. Kia also experienced one of the smallest changes in the percentage of returning customers in three years (-0.9%), compared to an average decrease in sales to returning customers (-22.6%). Kia’s electric vehicle-centric mindset may explain why it has seen continued success while major auto brands such as Toyota struggle to maintain relevance in the market due to a lack of electric vehicle strategy.
Electric vehicle sales have increased Despite recent industrial and economic hurdles, Toyota hasn’t even made the top 20 in terms of electric vehicle production. Toyota retreat no. 2 in US auto sales, with General Motors taking the lead.
What will be the implications of the EPA’s new rules when it comes to brand awareness and loyalty?
Car brands that put faith in their electric vehicles have seen more success and brand loyalty than those that have not. The EPA’s proposed rules may seem drastic, but the auto industry has been driving change with rapid adoption of electric vehicle initiatives from major OEMs and significant increases in electric vehicle sales. OEMs that prioritize certification have had more success in the past year.
OEMs were previously able to count on brand loyalty, with statistics emerging just five years ago. 81% of used and 76% of new car owners repeatedly buy the same type of car. While brand loyalty is declining rapidly in cars, data suggests that consumers are more loyal to OEM offerings, pricing and initiatives, with significant growth in EV sales at dealerships in the second half of 2022.
Despite still having fewer returning customers, Volkswagen managed to slow its year-over-year decline from -31% of customer return sales from 2020-21 to -16% in 2021-22. Significant decrease indicates that vw New auto strategy, which focuses on digital adoption and electric vehicle initiatives, is making a huge impact. Comparing Volkswagen electric sales statistics with returning customer sales data indicates that consumers may no longer be loyal to a particular brand, but the brand’s commitment to satisfying consumer demand and interests has become a determining factor in vehicle sales.
This trend can be seen across all car brands and price points. For example, Porsche is the only original equipment manufacturer that has seen a significant increase in brand loyalty by 32% since 2019. By prioritizing its electric sports car, Porsche has positioned itself as the indispensable luxury car brand.
Read more: Dramatic new EPA rule will force up to 60% of new US car sales to become electric vehicles in just 7 years
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