Here's another case of ignoring consumer preferences. Hertz made a big splash by buying 60,000 EV's from Tesla. Now, they are taking a $245 million write down as they unload one third of them. What went wrong? Customers don't want to worry about driving range and where to find a recharging station when renting a vehicle. Repair and maintenance costs have also been higher than anticipated. So, their CEO has been fired although the CNN article states that his predecessor actually made the failed bet on EV's. Eventually, EV's will go mainstream but Hertz is paying a big price for being an early adopter.
Hertz CEO out following electric car ‘horror show’ | CNN Business.
In case you hadn't noticed, the transition to EV's has hit a few roadblocks recently. Unsold vehicles are piling up on dealer lots. Sales in California declined in the fourth quarter of 2023 from the previous year. Hertz is selling off 20,000 of its EV's and replacing them with gas models. What's happening here?
These are some of the factors blamed for the slowdown:
I'd like to offer another perspective from the work of Geoffrey Moore. In his seminal book, Crossing the Chasm, Moore sought to understand why some new products, especially technology products, have initial success but ultimately fail to catch on with the broader market. He defined different sets of consumers that make up a total potential market in this way:
I think that EV's have caught on mainly with innovators and early adopters, establishing a strong position in the early market. They have yet to cross the chasm to the early and late majorities of customers who make up two-thirds of the total market.
Although the government and the auto industry have decided to go all in on EV's, consumers are looking elsewhere, particularly at hybrid vehicles that offer many of the benefits of EV's with the added security of familiar gas engines. Consumers have spoken and now manufacturers and dealers are scrambling to reduce EV inventories.
The Six Months That Short-Circuited the Electric-Vehicle Revolution - WSJ.
Loved the DunKings!
Overall, I found the Super Bowl ads to be underwhelming, but I did enjoy BMW's ad with the legendary Christopher Walken
In an effort not to offend anyone this year, Bud Light has developed a new brand character that grants drinkers' wishes such as having metal hair, bigger biceps, or Peyton Manning as a friend. No word yet if executives asked the genie to restore some of Bud's lost market share.
While we are on the nostalgia trip, here's the Super Bowl ad that helped launch the first Macintosh. It was directed by Ridley Scott.