Dubbed the echo boomers, since their birth rate growth paralleled that of the baby boomer generation, people in the Generation Y age range (19 to 31 years old in 2012) represent an enormous market for goods of any kind. Fortunately for hybrid and electric vehicle manufacturers, this group has a very strong affinity for these vehicles.
In its fourth annual Gen Y survey, the consultancy Deloitte found that 59 percent of respondents prefer an electrific vehicle over any other type of car or truck. And they heavily favored hybrid vehicles over vehicles with a gasoline-only powertrain.
This is good news for the industry. This group’s buying power is potentially a game changer. In the United States alone, there are an estimated 80 million Gen Y consumers. This group is one of the biggest domestic automobile buying market segments and the largest consumer segment since the baby boomers. According to Deloitte projections, one out of four new automobiles sold this year in the United States, and 40 percent of vehicles sold in the next 10 years, should be bought by a Gen Y consumer.
There are several reasons for the group’s high level of interest in hybrid and electric vehicles. Most notably, fuel efficiency: 89 percent of Gen Y consumers are considering buying a vehicle that gets better mileage. Interestingly, this was especially true when gasoline prices rise above $2.75 per gallon, which is the median price Gen Y consumers see as fair. This is a far lower cost per gallon value than many assumed would be needed to drive interest in hybrid and electric vehicles.
Furthermore, the study found that 49 percent of Gen Y consumers are willing to pay an additional $300 for each mile-per-gallon of improvement they can get out of a hybrid. And one other important finding in the survey is that Gen Y consumers view hybrid technology as proven and reliable.
The study also found that auto manufacturers may have an opportunity to capitalize on Gen Y’s connected lifestyle by developing innovative and low-cost personalization options. To tap into the younger buying market, hybrid and electric car makers are adding new features that will enhance the appeal of their cars to Gen Y consumers.
One example is a partnership between Salesforce.com and Toyota, where the two companies have developed a private social network called Toyota Friend. The network links Toyota customers with their cars, their dealership, and with Toyota through smartphones, tablet PCs, and other mobile devices. One feature of the network is the ability to send low-battery “tweet-like” alerts for electric vehicle and plug-in hybrid vehicle drivers.
And the Wall Street Journal reported that Tesla “wants to make sure that electronics in the car are cutting edge, like the vehicle itself,” and plans to offer a 17-inch touch screen display with Internet access and four USB ports to attach devices in the Tesla Model S electric car.
In another effort by manufacturers, Ford has teamed with Google in an experimental program to help optimize and automate the use of electric motors versus gas engines in plug-in hybrids. One application of this technology would be to automatically turn a gas engine on and off depending on whether a plug-in hybrid is entering a dense urban zone where only EVs are allowed.
These efforts and the findings of the study bode well for the hybrid and electric vehicle market in the years to come.
