If you are a product manager for a car, then you have a pretty well-defined life. Every couple of years, you work with your team to create an updated version of your product, work to get it manufactured, do the marketing, and then go do battle with all of the other car product manager. However, now things are starting to change. The way that cars are going to be made in the future will be different from the way that they are being made today. This means that the job of a car product manager is about to be turned on its head. Will they be ready?
Change Is Coming
Product managers know that a barrage of new plug-in hybrid and battery-electric SUV and truck models, including electrified versions of popular nameplates like the Jeep Wrangler and Ford F-150 pickup, are expected to hit U.S. dealerships in the next few years. Even General Motors is set to revive the Hummer nameplate as an electric pickup truck. Keep in mind that this was a onetime symbol of gas-guzzling excess. Product managers are trying to better reflect consumer preferences, which in recent years have tilted heavily toward taller, more versatile vehicles such as pickups and SUVs. Product managers realize that these models typically command higher profits than lower-margin sedans, helping product managers better absorb the still-expensive battery costs of electric vehicles.
Customers shift to bigger electric vehicles is also being driven by improved EV technology, which is enabling car companies to build more powerful battery packs that can move larger vehicles and provide more travel range on a single charge. Product managers realize that if you really want people to pay attention to electrics, you need to be playing where they’re interested. By next year, shoppers will have 78 plug-in hybrid and battery-electric SUVs to choose from, up from 38 last year and just four five years ago. Just to make things even more competitive analysts expect about a half-dozen battery-electric pickups to hit the market within the next two years. New larger vehicle offerings will range from plug-in hybrids which are vehicles that can run on electricity but also have gasoline engines to fully electric models.
It’s not just the run-of-the-mill cars that are made for the masses that are going the way of electrification but also the European luxury brands like Audi and Jaguar. These firms have been unveiling new electric SUVs in the U.S. that have more than 200 miles of range in the past few years. U.S. performance cars are also going electric. Ford has announced that it will begin selling its battery-electric Mustang Mach-E SUV. The Ford product managers are investing $700 million to produce hybrid and electric versions of its F-150 pickup, the best-selling vehicle line in the U.S. Also, Toyota will be rolling out a plug-in version of its best-selling RAV4 compact SUV.
The Future Is Electric
For years, most product managers largely built electric vehicles as so-called compliance cars, or fuel-saving models that could help them meet stricter regulations on tailpipe emissions. Customers who were looking to buy an electrified model were mostly limited to smaller vehicles like the Chevrolet Bolt and Nissan Leaf. Product managers realize that those offerings have failed to gain broader appeal. Sales of plug-in models accounted for only about 2.4% of the overall U.S. market last year. Product managers are now realizing that if they want to stimulate broader demand for these vehicles they are going to have to move beyond selling them only on environmental benefits. It is no longer possible to just rely on government subsidies and incentives. Product managers need to be proactive.
With the industry pledging more than $225 billion globally toward building more electric models in two years, product managers are eager to see a return and are looking to their reliable profit generators – SUVs and pickups – to provide it. However, product managers need to understand that there are risks. It still isn’t clear whether customer demand will materialize or if product managers can sell enough vehicles to justify the costs. Product managers need to keep in mind that consumer appetite for electrified vehicles in the past has been limited.
What has to be realized is that electric and plug-in models are still far more expensive than gas-engine options. They can cost customers anywhere from around $6,000 to $20,000 more, depending on range and vehicle type. There are federal and state tax credits that can be used to narrow the price gap, but the difference still can be substantial on many larger models. And people often buy large SUVs and trucks for towing. However, they may have to make compromises with an electrified model, because hauling is likely to deplete the vehicle’s range. And the new electric cars will likely have to deal with many of the same challenges electric cars have faced in the past, such as drivers with little electrified-car experience worrying about not finding a place to plug in or getting stranded without enough battery charge.
What All Of This Means For You
Car product managers have had to deal with a great deal of competition for a very long time. The good news for them has been that cars themselves have not changed all that much. However, it is starting to look like that is getting ready to change. Electric cars that used to be just a curiosity are now starting to go mainstream. When this happens, product managers are going to have to adjust to the new reality. What do they need to do?
Product managers have been producing electric cars for a while. They’ve been creating them in order to balance out the emissions that their gas-powered cars produce so that they can meet government regulations. However, product managers are now viewing larger electric vehicles as potential sources of new revenue. Building larger electric cars is being made possible by improved EV technology that allows larger cars to be built that will be able to travel longer distances. Not only are ordinary cars going electric, but also performance cars from European car companies and U.S. companies also. There is a fundamental question as to if consumers are going to want to purchase the new cars. Additional challenges are that electric vehicles cost more and may not be able to easily tow heavy loads.
It’s pretty clear that the world in which we live is changing. Electric cars are a new thing, but to consumers they are starting to make more and more sense. What was once a novelty will soon become a real option when people go shopping for their next car. Product managers need to understand that this is going to be a new experience for most people. That means that their questions about switching to an electric vehicle are going to have to be answered before they are going to feel comfortable buying one of these cars. If we take the time to work with our new electric car customers, then we can make this new breed of electric car a big success.
Question For You: How can product managers best answer customer’s questions about electric cars?
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What We’ll Be Talking About Next Time
I’m pretty sure that even if you didn’t know it, there are more Subway sandwich restaurants out there than there are McDonald’s restaurants. With the chain being that large, you would expect that they must be doing quite well. In the past that has been the story. Much of what the Subway product managers have been spending their time doing has been looking for ways that they can power the chain’s expansion. However, lately things have changed. The Subway product mangers now have a new challenge on their hands.