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Boomers are the key generation for Electric Vehicles

Barry Robertson blogs at 15th Nation and is the co-founder of J.D. Power & Associates. Let’s just say he knows quite a bit about the automotive industry and what’s new. We have reprinted here, with Barry’s permission, his review of the 2016 Detroit Auto Show. And we appreciate his nod to my recent MediaPost blog!

The 2016 Detroit Auto Show: fuel misers provide a guilt-assuaging sidebar to the glamour and glitz

After a U.S. sales record of 17.5 million new light duty vehicles in 2015, the automotive press was bedazzled – understandably – by the gorgeous array of new vehicles on display at the 2016 Detroit Auto Show.

In an obligatory nod to the upcoming submersion of the Maldives and Manhattan – Trump Tower may soon install a boat dock at the 3rd floor level – manufacturers also featured some exciting new fossil fuel savers.

The 200 mile range, all-electric Chevy Bolt took center stage in the skip-the-gas-station department, but our personal favorite was the rather more, er, idiosyncratic Elio Motors P5. At $6,800 and claiming 84 mpg, we’re talking big time green savings, both personal and planetary.

And, while lacking the steampunk panache of the Morgan Aero three-wheelers which – equipped with a rowdy exterior V-twin motorcycle engine – terrorized English country lanes in the 1920s and 1930s, it has serious geek street cred.

Hybrid sales fell in 2015, but BEVs grew

All this emphasis on reducing fossil fuel use coincided with U.S. gas prices well below $2 for a gallon of regular (Gas Buddy). Adjusted for inflation, $2 is the equivalent of 33 cents in 1970 – less than the actual average of 35 cents that year (Energy.gov) when many young Boomers were already driving.
Superficially, these low fuel prices contributed to a 5% drop in “electric” vehicle segment sales versus 2014.

But a closer look shows battery-only units (BEVs) – sans gasoline aids of any type – actually grew by 8%, from 67,700 to 73,200 (Inside EVs).

In reality, it was plug-in hybrid (PHEV) and range extender model sales that fell – by a whopping 22%! Purists may groan, but these models are lumped into the EV category –and qualify for tax credits – because they eke out a few precious miles of battery travel before those pesky fossil fuels (yuk!) come to their rescue.

The 2015 decline of PHEVs mirrors a 15% drop for regular hybrid sales. With the arrival of a dozen or so new BEVs, hybrid technology’s green cachet has waned and, yes, lower gas prices have further eroded the appeal. For now. Time will tell. OPEC too.

Analyzing the patchwork of micro-niche, eco-enthusiast models that make up the tiny BEV market requires a magnifying glass and a Captain Midnight decoder ring.

Forced to build them – and to publicly pretend they really, really want to – until Tesla’s breakthrough, automakers weren’t exactly falling over one another to serve an unprofitable market sliver.

As Reuters quotes former GM vice chairman Bob Lutz as bluntly saying, because of government mandates, “Electric vehicles are going to have to be crammed in the market at way below what it costs to make them.”

The Boomer-Plus Generation: the key to BEV sales success

One thing is certain, with government policies and much C Suite face on the line, BEVs are here to stay. The key question for automakers is: do you want to sell more?  For those who answer “yes” the Boomer-Plus buyer is crucial.

In the fragmented BEV domain of techies, visionaries and devout eco-believers, industry data on buyer demos is sketchy. But here’s what we’ve gleaned:
More than half (53%) of early Tesla S buyers were over fifty, as were 43% of all BEV buyers through 2013, an era dominated by the Millennial-friendly Nissan Leaf (source: Edmunds.com, Experian).

With Leaf’s huge 2014-2015 sales decline (30,200 to 17,300), and major growth by Tesla S and BMW i3, we now figure the BEV buyer median age at fifty-something.

Far from needing to save money on fuel, BEV buyers are well-healed.

Research firm Strategic Vision tells us the median income for early Tesla S buyers was over $290,000 and TrueCar.com reports medians for early buyers of Ford Focus EV ($199,000) and Fiat 500e ($145,000) were way higher than among the proles who buy the gasoline versions ($77,000 and $73,000).

Even the admirable new 2017 Chevy Bolt, lauded by WIRED as “the first true mass-market electric car” costs $37,500. In order to benefit from the Federal tax credit of $7,500 and get the net price down to a ballyhooed $30,000, we figure buyers/lessees will come from the top 15% in terms of income/assets. Not exactly mass-market.

Eventually, with more improvements in range, BEVs will move out of the visionary stage. But older, more affluent buyers – that would be us, the over-the-hill, fifty-plus crowd – will remain the dominant generation.

Silicon Valley aside, most Millennials don’t have enough money and typical Gen Xers are struggling to raise families and put their kids through college.

So expect a continued skew to the 50-plus arena – the owners of around 80% of U.S. household net worth and buyers of half the nation’s new light duty vehicles.

Boomer-Plus: America’s most adaptable generation

It’s not just about demographics: to the chagrin of Madison Avenue’s Millennial-obsessed, 18-49 demo fetishists, the Boomer-Plus consumer, born 1940-1966, is just about the most adaptable on the planet.

First, we’ve been adapting – and early-adopting – all our lives; we’re really good at it.

We propelled import car brands past the Detroit nameplates our parents loved.
We mainstreamed light trucks, SUVs and CUVs into market dominance.
We were the first to jump aboard hybrids and BEVs – remember EV1?

And, now in the caregiving, empty-nesting and grandparenting lifestages, consultant Lori Bitter, principal of The Business of Aging, reports that Boomers are more open than ever to new possibilities. In a recent Media Post column, Lori explains they are at a point “with the most ‘consumer moments’ and an openness to trying new products and services that they may have not considered in the past.”

At 94 million strong – a population bigger and far more affluent than any European country – the Boomer-Plus Generation is destined to drive the BEV marketplace past the tipping point.

Brands serious about realizing EV profits, not just satisfying regulators, need to plug into the 50+ space before their competitors do. We can help spark the conversation.

13th ANNUAL WHAT’S NEXT BOOMER SUMMIT COMES TO THE NATION’S CAPITAL , MARCH 23, 2016

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Nation’s Leading Conference Brings Together Boomer Marketing Experts and Industry Leaders to Focus on “Seizing the Opportunity of the Longevity Economy”

Washington, D.C. plays host to the 2016 What’s Next Boomer Business Summit, the nation’s leading annual conference for the boomer and senior markets. Taking place on Wednesday, March 23rd at the Omni Shoreham Hotel, the upcoming summit shines a spotlight on “Seizing the Opportunity of the Longevity Economy” and includes a prestigious lineup of speakers, sessions, and exhibitors. Learn More →

MediaPost Engage Boomers-The Psychology of Marketing to Grandparents

The Psychology of Marketing to Grandparents

Let’s face it. Psychologist Abraham Maslow never wanted to be a marketer. In his work Toward a Psychology of Being he describes the 13 personality attributes of the self-actualizing person. Often depicted as the top of the pyramid on the Hierarchy of Needs, “Self-actualization” is the realization of one’s full potential, with a focus outside of self. Learn More →

Lori’s Interview with Barry Moltz on Business Insanity Radio

I was recently interviewed by Barry Moltz on Business Insanity Talk Radio. You can listen here:

 

“The Grandparent Economy” on Yahoo Finance

Marketing to Grandparents

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Abraham Maslow never intended to be a marketer. But when it comes to creating products, services, and messaging for older adults, his “13 personality attributes of the self-actualizing person” from Toward a Psychology of Being provide focused guidelines for creating a great creative brief. Recall that self-actualization is the realization of one’s full potential, with a focus outside of self.

Many of the grandparents we spoke with for The Grandparent Economy considered this phase of their development to have begun with the birth of that first grandchild. It is described as a turning point, as a time when the future comes into sharper focus. There is a realization of their mortality, and of family life continuing after they are gone. Relationships take on greater meaning and a sense of selflessness takes over. Learn More →

Reaching the Mature Audience

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I have always loved the concept of AARP’s “Movies for Grown-ups.” Mature adults are different. Developmentally, as we age, we connect more with great stories and complex, layered characters; in many ways we process our own lives through the stories of others. Praise for the movie, The Intern, with Robert De Niro and Anne Hathaway resonates with older adults navigating the intergenerational workplace. Learn More →

Happy Grandparents Day – Here’s why it’s important to your business

Grandparents Day is not a “Hallmark Holiday.” It is the work of one woman, Marian McQuade, who made it her mission to educate young people about the contributions of seniors and their importance in the community. She encouraged young people to adopt a grandparent, not just to celebrate the day, but for their lifetime. By 1978, led by Senators Randolph and Byrd, a resolution was passed by Congress and the proclamation signed by President Jimmy Carter. Marian knew what she was talking about. She had 15 children and 43 grandchildren!

Read more here on the Coming of Age blog . . .

AARP Launches Influent50

AARP is betting that a new generation of seniors mean more spending by marketers. Scott Tong of MarketPlace Business talked to Lori about the risks and rewards of marketing to older consumers.

 

Next week a new marketing company linked to AARP will launch to target adults 50 and over. Influent50 is part of AARP’s for-profit subsidiary. Learn More →

Join me in Chicago at ASA’s Aging in America 2015 & What’s Next Boomer Summit

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I will be in Chicago from March 23rd through the 27th for a week-long conference with aging professionals from all over the world. I am delighted to be presenting a program on Grandparents and Intergenerational Trends for ASA’s Aging in America Conference. Christine Crosby, Founder of GRAND Magazine will be joining me on this program:

The Grandparent Economy: How Families Are Evolving in Unprecedented Times
Tuesday, March 24th 1-2 PM
For more information: http://www.asaging.org/aia Learn More →