Porsche has many reasons to go fully electric, so why aren’t they? Over the last years, concern for the environment has significantly increased due to global warming. This has led customers to base their purchase decisions on environmental issues. As sustainability becomes increasingly important, new opportunities and challenges have arisen. This new change requires companies to partake in environment-conscious business practices and decision-making skills. We are going to to establish why Porsche has chosen to not fully go electric yet and how this can contradict the purpose of even selling an electric car.
We will conclude that, as a popular car brand with a global reach, Porsche should go fully electric to help shape new social norms, preferences and better understand the actual impact of its decisions. Finally, we will also suggest practical recommendations on how Porsche can make the full transition to being fully sustainable whilst still avoiding a huge loss in customer base.
Porsche has Fear of Losing loyalty
As mentioned in the introduction, this chapter will be focusing on the loss avoidance theme. Porsche is using, based on the Cornwell and Higgins research, both the avoidance and approach motivation philosophy. Porsche is using the approach motivation in the sense that it wants to maintain its old customers and keep producing combustion to satisfy their dedicated fanbase. However, in the same time that Porsche is using the approach motivation to retain its old customer base, it is also using it to move towards the future and gain new fan bases with its new electric car. Porsche’s behaviour also indicates that it is using the avoidance motivation or attempting to avoid a loss in the combustion engine market and its loyal customer base.
Porsche demonstrates the approach and loss motivation on their website with its ‘’Porsche strategy 2025’’. It states that they have a sustainable plan but is not stating that it will go fully electric. This can also be a direction that Porsche is already taking by lowering the emission output the car produces, in this manner Porsche’s strategy is contradicting in the sense that it is not taking the plunge into fully producing electric cars, which are more sustainable than cars that produce ‘’fewer emissions’’.
If Porsche is to overcome its fear of losing loyalty, it must embrace these philosophies and utilize them in a way that is most beneficial to the company and its surroundings. How Porsche could exactly do this will be explained in the conclusion and recommendation section.
The following chapter will be discussing how preference can influence decision making and how this can also influence loss avoidance. Due to that, the preferences of Porsche customer are the very reason that Porsche fears losing customer loyalty, it is essential to have this theme in the next chapter to further explain.
Contemplating decision due to preference
With all companies depending on customers and their money to stay viable and maintain a position in the market. The customer decision-making process and factors influencing purchases are of huge significance for companies. With the market offering fuel cars and electric cars, it is important for Porsche and the research question of this report to identify what influences influence the decision-making process of customers.
Depending on which model and what brand, in general, electric vehicles are more expensive to purchase than gas-powered vehicles. However, electric vehicles are cheaper to run.
Some people are afraid they will not be able to find a charging station when they need it. However, in the United Kingdom, there are now more charging stations for electric vehicles than there are for fuel-powered cars. Additionally, the government is even thinking of installing electric charging points for new houses or buildings built with parking spaces. Sustainable infrastructure is now taking shape in many countries.
Also, it cost an electric vehicle more time to charge up than a fuel car that just gets filled at a gas station in a few minutes. However, most individuals do not partake in daily driving for long distances, which means that charging an electric vehicle at night will suffice the use of an electric vehicle for a whole day. Many people are misinformed about electric vehicles, which entices a share of the customer base to stick with gasoline cars, “old habits are hard to break”. Regardless, with the increasing use and media coverage of electric vehicles, it can be considered that in only a matter of time before these ‘misinformed customers’ will be persuaded as well.
Porsche dealerships earn money with the maintenance of gasoline cars, compared to electric vehicles that hardly need maintenance. An electric vehicle contains much fewer parts and therefore is at a lesser risk of issues and maintenance.
Moreover, Porsche has a concern for the customers that depend on the thrilling sound caused by the performance model engines. These customers love the noisy engine causing a visceral thrill that EV’s cannot provide. However, Porsche is attempting to find a way to insert an artificially sound into the cabin. Tesla, a very similar company to Porsche, has successfully proven that there is a significant demand for electric environment-friendly cars combined with design and performance.
Lastly, the first all-electric Porsche car, the Taycan, has already revealed that there is strong customer demand for the model. Preregistrations have been analysed and shown that there are a significant number of customers that are interested enough to visit a dealership and register. Furthermore, Porsche has already announced that their best-selling model the Macan compact SUV will be redesigned to become fully electric in the next few years, due to the market potential.
Deciding the future
Over the past decades, humans have been releasing heat-trapping gasses, as a result of the modern world developing. With the consequence of rising sea levels, glaciers melting, forests burning and dying and wildlife significantly disappearing. It has become clear that human influences cause global warming along with all its consequences.
Sustainability has become one of the most important factors in customers’ purchase decision and is shaping new social norms. Thus, more customers weigh environmental concerns and consider, companies’ green reputation when buying products or services. Numerous studies have shown that the sustainable factor is matching quality and price as a deciding purchase factor.
Therefore, it can be considered as a significant detriment to a company’s brand if one has an environment-harming reputation. According to a survey conducted in the United States of America and the United Kingdom, an overwhelming demand for brands to support sustainable lifestyles has been revealed. If a brand is not helping their customers to improve their environmental and social footprint, the brand will be in danger of disappointing 88% of them.
The governments are supporting electric vehicles as well. With regards to the future, this could mean combustion vehicle users and sellers can expect disadvantages in the future and additionally miss out on numerous benefits that align with green cars. For example, electric car users may soon receive multiple benefits, such as reserved electric parking and tax exemptions. This is all part of the government’s net-zero emissions target for 2050 to stimulate more people to drive and choose electric vehicles instead of polluting fuel cars.
If Porsche decides to go fully electric it can help shape a new social norm and help governmental goals of reaching zero emissions.
Making a difference
We cannot be 100% certain that human behaviour will change if Porsche become fully electric, so Porsche customers may go somewhere else to get their combustion engine luxury cars if they do not get it from Porsche and thus lose a huge percentage of their customers, however this is a risk that may be worthy to take for ethics sake and social norms.
We suggest that if Porsche wants to make an electric car, it should be fully invested and take examples from Tesla, creating large charging networks, using vegan leather, supporting solar energy and many other actions that represent sustainability.
We recommend that Porsche does go fully electric as it may have a drastic influence on the world and its social norms. If Porsche, a popular worldwide luxury car brand, were to go fully electric, it would have a drastic impact on the social norms of what is widely accepted and what is not. The number of electric vehicles on the roads is increasing, but there are still more combustion engine vehicles than electric.
By doing this Porsche may even influence on the preference people have choosing between Electric and gasoline cars, and not the other way around with the method that Porsche currently has and lets the people influence Porsche preference for what car is to be produced.