Electric Car Company
Instructor Notes
The relative values for different segments may look like this:
Segment
(by value driver)
5hp engine & tank
Air conditioning
Metallic paint
Price buyers for
local transport
Low value, no need
Low value
None
local transport
travel
long-distance
Possible solution
If the potential market of price buyers for local use is large, then it makes sense not to burden the
car with costly extras as standard equipment. We would propose offering the 5hp engine NR.
The car is more efficient than hybrids, but the need to fill up every 150 miles after the first 250
unless recharged is a negative differentiator versus traditional hybrids. The AC is very costly to
produce, implying that it would have a low margin at a price comparable to what customers
expect to pay for AC in a car. However, the eco-innovators will want the cool technology,