Access to unprompted, authentic engagement from consumers can help decision-makers across the industry better understand demand dynamics.
As we contemplate the transition from combustion to electrification, not a day goes by that we don’t read something new regarding what OEMs, suppliers, and industry disruptors are doing to bring new technologies and products to market.
The pace of innovation is incredible; OEMs alone have committed hundreds of billions in capital investment. But not all of these ideas will find commercial success, and some will prove to be nothing more than vapour.
Almost all the buzz relates to the supply side of the industry—look at what’s coming, it’s going to be great! I share this enthusiasm for a carbon-free future. Anyone who has driven a battery electric, plug-in hybrid or fuel cell vehicle knows how satisfying they are to drive. Forecaster LMC Automotive predicts no fewer than 120 full BEV models available to Canadian consumers by 2030. Based on the recent pace of new product announcements, I think this may be conservative.
The Government of Canada has jumped on the supply-side bandwagon with the announcement of the 2035 mandate to achieve 100 per cent zero-emission passenger vehicle sales. I applaud the ambition—Canada needs to do its part to mitigate the impacts of climate change for current and future generations.
One respected survey concluded that nearly seven in 10 consumers are likely to buy an electrified vehicle within the next five years.
However, as I learned all those years ago in ECO100Y, market efficiency is only achieved when demand and supply are in balance, or at least close to it. Are we paying enough attention to the demand side of the equation? Where do Canadians really stand on EV adoption? Are they ready and willing to commit to electrified vehicles on the 2035 timeline? The planet may be screaming “yes,” but are Canadians?
This is not a question to be answered a decade from now as we close in on the 2035 objective. To have any hope of reaching the zero-emission goal, EV adoption needs to increase quickly and with sustained annual acceleration. Starting yesterday.
Several surveys have been released this year suggesting Canadians are hungry for EVs. One respected survey concluded that nearly seven in 10 consumers are likely to buy an electrified vehicle within the next five years. Interesting.
According to Statistics Canada, only 4.6 per cent of light vehicle sales in Q2 2021 had electrified powertrains (BEV and PHEV). Obviously we are comparing apples and oranges with respect to consumer timelines (now, versus five years from now), but a 65 percentage point gap between what consumers say they intend to do, versus what they are actually doing, is cause for concern.
How do we reconcile this gap? How do we develop a deeper understanding of true consumer demand to ensure that, as OEMs, dealers, charge point providers, auto lenders and government policy makers, we are making these big-bet decisions with the full picture of both demand and supply considerations?
If you do what you’ve always done, you’ll get what you’ve always gotten.
As someone who has earned a living conducting consumer studies, I understand the value survey research can deliver. It works extremely well when you know the audience you wish to speak to and can engage with them easily—and customer experience feedback programs are a good example.
But in the last few years, the limitations of this traditional approach have become starkly clear when one is trying to understand future consumer behaviour—low response rates, slow speed and high cost among them. And these aren’t even the biggest challenges facing decision-makers when trying to determine the path forward. The most significant issue relates to the “Say versus Do” gap created when consumers are asked questions related to future intent. How likely are you to consider an EV as your next vehicle?
For many consumers, whether they know anything at all about EVs as an alternative to the ICE vehicle they currently drive, there is a natural tendency to avoid sounding uninformed or not “on trend”—the typical response is “sure.”
Have we seen this kind of response bias before? You bet we have. Think about the 2016 U.S. presidential election. How many polls predicted a Democratic White House? Most of them. Why? Because respondents said one thing in the survey and did something completely different in the privacy of the voting booth. It’s clear at least some Canadians are doing the same thing when it comes to EV intentions.
So what’s the alternative? How do we overcome the “Say” versus “Do” gap to truly understand the purchase motivations, barriers, and authentic intentions of Canadians with respect to EV adoption?
Augmented research
Augmented research uses AI techniques to observe the online discussion and behaviour of tens of thousands (or millions, depending on the subject) of Canadians to assess their attitudes, beliefs, sentiment—and most critically, their anticipated future behaviour on a topic like EV adoption. This approach delivers insights from a far larger sample base than traditional research can achieve, with greater speed and lower cost. And for those of us keenly sensitive to privacy considerations, augmented research does not collect any PII; the identity of individual Canadians is protected.
What makes augmented research so powerful (at least in the case of Clarify Group’s Canadian partner) is the deployment of proprietary algorithms to accurately sample the desired audience, a key advantage of survey research that can now be replicated digitally. This approach yields a target audience where we know with high certainty demographic variables like age, gender, income, and household formation. Lookalike samples are created in each province to ensure we are comparing apples to apples across the country.
Augmented research is not limited by time and space, so we can go back to see how attitudes and behaviours have evolved over time. And, because we are not “prompting” Canadians with survey questions, we are able to assess their natural level of engagement on topics like EV adoption in real time. The “Say” versus “Do” gap is eliminated, leading to more accurate predictions of consumer behaviour.
Augmented research is not limited by time and space, so we can go back to see how attitudes and behaviours have evolved over time.
Our Canadian augmented research partner successfully predicted the outcomes of both the 2016 and 2020 U.S. elections, as well as the U.K. Brexit vote, to name a few high profile examples. How? Augmented research captures unprompted, authentic engagement on topics and does not rely on survey question responses, which can yield significant gaps between what respondents say versus what they ultimately do. Sounds amazing, right?
In the coming weeks, the power of augmented research will be deployed for the first time in the Canadian automotive sector to help decision-makers across the industry better understand demand dynamics. We’ll finally have predictive—not historical—research insights with which to maximize the strategic bets of stakeholders across the industry.
The transition to EV? Bring it on.
Innovate to prosper.
