Case | HBS Case Collection | February 2010 (Revised June 2012)

"Plugging In" the Consumer: The Adoption of Electrically Powered Vehicles in the U.S.

by Elie Ofek and Polly Ribatt

Abstract

How will U.S. consumers respond to the proliferation of alternative-fuel vehicles, such as cars powered partially or completely by electricity, in the coming decade? After a century in which fossil fuel-powered vehicles dominated the market, it appeared consumers would have an unprecedented level of choice as to the type of car they purchased and drove. Automakers were introducing various models that used electricity for power, and other power sources, such as fuel cells, were also seeing increased attention. Some observers believed the time was ripe for widespread adoption of these new vehicles: consumers and policymakers were increasingly concerned about the fallout of U.S. dependence on fossil fuel-powered cars--namely, adverse environmental impacts and reliance on foreign sources of oil, plus the fluctuating price of gasoline--and innovative infrastructure technology was being developed to support electric-powered cars. Despite these promising developments, it remained unclear whether consumers were ready to switch to alternative-fuel vehicles on a large scale. Would they be willing to make the lifestyle tradeoffs required for grid-dependent vehicles? How should policymakers intervene, if at all, to encourage adoption, and what marketing activities and incentives might firms employ to stimulate demand?

Keywords: Energy Sources; Policy; Marketing; Demand and Consumers; Business and Government Relations; Natural Environment; Pollution and Pollutants; Adoption; Auto Industry; United States;

Citation:

Ofek, Elie, and Polly Ribatt. "Plugging In" the Consumer: The Adoption of Electrically Powered Vehicles in the U.S. Harvard Business School Case 510-076, February 2010. (Revised June 2012.)