THE RISE OF THE ELECTRIC CAR One of the most notable social trends afi'actin consumer behavior is the idea Page of ging green. As climate and environmental cincerns increase in their seriousness and impact, consumers seek to buy reen products that might help mitigate or combat the problem. In response, many companies are developing new green products including electric cars. The first electric car actually was built in 1891, but it lost its Popularity when Henry Ford introduced the gas-powered Model T. Electric cars regained consumers' interest as Toyota developed its Prius in the late 1990s. The original Prius actually was a hybrid, powered by both gas and electricity; its success prompted other companies such as Honda, General Motors (GM), Ford and Chevrolet to innovate their own hybrid models, as well as some all-electric versions. By the early 20009s, though all the major automakers had terminated their all-electric program. It was not until 2006, when Tesla Motors revealed its Roadster. that a modern version of the all-electric car became a distinct and appealing possibility. Tesla remains the gold standard for electric cars. The Model S all-electric sedan is the top-ranked ultra-luxury vehicle. Yet its high price has kept the brand from being a very widely purchased car. For example, a new Tesla Model S ranges from about $80,000 to $100.000. Even if more customers might want to purchase an all-electric car, few of them can afford a Tesla. In response, Tesla innovated a less expensive entry model, the Model 3, that starts around $36,000 for the Standard Range and goes up to $61,100 for the Performance Model. In parallel, other companies have released their more economical allelectric options: the Chevrolet Bolt starts around $37,000 and offers a battery life comparable to that of the Tesla Model S. General Motors also recently decided to compete with tesla directly. One of Tesla's greatest advantages has been its over-the-air softward which automatically and regularly updates the car's software when they are plugged in overnight. Recognizing that it already installs OnStar as a safety service standard on any GM vehicle, GM has found a large fleet of connected cars at its disposal already. Therefore, it plans to use OnStar as a means to compete directly with Tesla's software. Furthermore, GM's latest all-electric car seeks to do more than address just the problem of climate change; it wants to help drivers overcome the problem of congestion in cities. lts all-electric E 100 will cost only $ 14,000 before incentives; with the incentives, the paid price drops to close to $5,000. But it is being launched only in China, under the company's Baojun brand. The chinese car market is largest in the world and the electric car segment is the largest growing segment in China, due in part to the subsidies and incentives offered by the national and local governments. Accordingly China already makes up to 40 percent of the worldwide electric car market. The E100 has been designed specifically to meet the needs of consumers living in Chinese cities, in that it is compact, seating only two adults, and easy to maneuver in the heavily populated streets. Furthermore, its top speed is 62 miles per hour, and its battery can last for about 96 miles, and then takes only about 7.5 hours to charge. It might not be an ideal option for someone living in a rural area who needs to travel long distances, but it is perfect for a city dweller. Finally although the car does not cost much to own, the E 100 still provides some key luxuries: the interior features a digital dashboard, a seven-inch touchscrcen center console. and Wi-FI capabilities. Within the week of its announcement, more than 5,000 people had registered to buy the first 200 models of the E 100, spurring the company to make another 500 cars available quickly. Although the E 100 will be available only in the Guangxi region of China in the immediate term, GM plans to expand its availability throughout the country as soon as possible. Questions 1. Discuss how specific environmental issues examined in this chapter impact the development and sale ofelectric cars. 2. Which market do you believe will be more successful, Tesla in the United States or GM's E 100 in China? Defend your answer.