Why Aren’t Automakers Connecting Better with Green-Minded Consumers?

05.24.18 | Blog | By:

A longtime friend of mine, let’s call her Jen, is a children’s book illustrator and genuine tree-hugger. She has a farmette in the foothills back East and likes to hike and ski, with her two dogs along for the ride. Her personal values are as green as they get. But a Prius doesn’t work for her, let alone anything that plugs in. So what did she buy a couple of years ago when it was time for a new car? A Jeep Cherokee. She didn’t really cross-shop. “I need a Jeep,” was what it came down to in Jen’s mind.

She realized it burned more gas than she’d like to burn in an ideal world. She compartmentalizes her eco-ethics as far as car buying is concerned. So when considering her choices she just focused on the usual options and price. The idea that she might help the environment by cross-shopping — among similarly equipped competing vehicles or even among Cherokee trims that get a few more mpg — didn’t cross her mind. Why should it? Gasoline prices were back below $3 a gallon. Other than the cacophony about Tesla and other electric cars — fascinating, perhaps, but irrelevant as far as her needs were concerned — little in the automotive mediascape spoke to how vehicle choices might matter for the planet.

‘You can’t force us’

Jen’s story underscores a serious problem behind the dispute over fuel economy and greenhouse gas standards: the disconnect between consumer preferences and the need to address global warming.

Whatever regulatory compromise is reached (or not), this conflict should serve as a wake-up call that a serious effort is needed to confront what will otherwise be an ongoing source of strife, as what consumers value in the showroom contradicts what many of the same individuals value through political support for climate action.

Even as a researcher whose studies have supported stronger CAFE standards, I recognize the element of truth in automakers’ complaint that “you can’t force us to sell cars that customers don’t want to buy.” Of course, the fact that markets fail to address certain problems is the reason there are rules in the first place, and history shows that “technology forcing” regulation can successfully effect changes in vehicles that customers don’t seek when car shopping and which few if any would buy if offered as a price-bumping option.

The catalytic converter is a silver bullet in this regard. One can have as large and powerful a vehicle as one wants that is also as clean as it needs to be without compromising functionality, while the costs and emissions controls are largely hidden from the customer. Neither automakers nor policymakers had to confront the consumer-interest problem as successive clean-air rules cut smog-causing emissions to vanishingly small levels.

However, there is no silver bullet for CO2. Fuel economy is a whole-vehicle design issue, against which size, performance and many other attributes inherently trade off.

Electrification will remain a slow and costly slog. Yet it’s on this “solution” — impractical for most consumers — that all the green marketing buzz is focused. Far less attention is paid to the large number of consumers such as Jen and the vehicles that could cater to their needs and political values.

Shared responsibility

How big is the potentially receptive population of consumers who might act on their environmental ethic when car shopping, if given the knowledge and encouragement? As far as I know, no one has systematically estimated it, at least publicly, so that would be a useful market research task.

We do know that many consumers are concerned about the environment and increasingly so about global warming. The University of Michigan Energy Survey, which I direct, has found that the number of Americans who view global warming as the aspect of the environment most affected by energy use has now risen to 36 percent, compared with 25 percent when we launched the survey in 2013. It also finds that more Americans (over 60 percent) express higher levels of concern about the environmental impact of energy than about its affordability.

Moreover, many consumers see protecting the environment as a shared responsibility, with a role for individuals as well as government and industry. A Green Gauge survey that asked “Who should take the lead in addressing environmental problems?” found that 38 percent of the public said “individual Americans,” compared with 45 percent saying “federal government” and 29 percent saying “business and industry.”

Thus, perhaps 30 to 40 percent of Americans might be motivated to consider a more efficient vehicle for environmental reasons. That’s an order of magnitude more than are buying EVs, in spite of large subsidies and years of promotion.

The question is how to help consumers connect the dots between fuel economy and their personal green leanings. Otherwise, vehicle efficiency is seen as merely an economic concern, of little interest when gasoline prices moderate.

That’s been the situation for several years, with fuel economy again low on the list of what consumers consider important. Most buyer surveys don’t even ask about environmental performance, and when they do, it is usually tied to alternative-fuel vehicles rather than more efficient gasoline vehicles.

Square zero

So a major effort will be needed to educate and empower consumers about how they can bring their ecological sensibilities into the decision process in selecting their next car.

We are, however, at square zero in terms of how to go about this task, and this op-ed can do no more than put it on the table.

Who can lead such an effort? It may be difficult for automakers because of their competitive positions. But it could be an opportunity for major dealer groups, perhaps collaborating with automotive media sites, which cover the full range of brands and already provide comparison shopping information and advice on other vehicle features.

Government should stick to providing objective data; the EPA fuel economy label values are fine in this regard. The cultivation of eco-buying will require a long-haul effort, which can’t risk being torqued around by changing political proclivities.

We can’t realistically expect green marketing initiatives to engage all consumers or fully eliminate the market disconnect. But a well-designed, broad-based effort could engage sizable segments of the market, far more than the few percent now being moved at very high cost and with limited results by narrowly focusing on EVs. Such an effort will make it easier for automakers to realize some market value for the design changes needed to meet ever higher fuel economy goals. It’s certainly worth a shot.

 

This op-ed article was originally published in Automotive News and is republished with permission.

John M. DeCicco is a research professor at the University of Michigan Energy Institute (UMEI) where he addresses energy and environmental challenges through an interdisciplinary approach anchored in physical science and synthesizing insights from economics, other social sciences and public policy.