Here's the scenario: A customer informs you they will be purchasing a car with Vehicle Electrification (VE). The VE products would include Hybrid Electric Vehicle (HEV), Plug-In Hybrid Electric Vehicle (PHEV), Extended Range Electric Vehicle (EREV), Battery Electric Vehicle (BEV), and Fuel Cell Electric Vehicle (FCEV). What should they be looking out for?
Whether it be new or used, there are some things that customers may need to know prior to making the purchase. Although there is a litany of technical topics that you could cover with the customer, you have decided to narrow the discussion to a broader list to ensure that they understand the range of VE product ownership considerations.
1. Insurance costs – could be higher cost due to new technology.
Insurance costs for VE products may be higher than that of a traditional vehicle depending on your location as well as cost of vehicle. This can be due to placement of expensive high voltage components in the probable crash zones of the vehicle. Even if the components are not placed in highly probable crash zones, the cost of electric propulsion components can be very high and the insurance companies may react accordingly with the insurance premiums.
2. Vehicle Residual Value – may not be known until after a vehicle has been released into field for many months or years. Customers need to become more familiar with the particular cost of ownership, relative to specific vehicles – based on the vehicle history. This information is readily accessible on several reputable website sources to help a prospective client/customer determine the historical value and quality of a VE product. Check out this and this, for starters .
Residual Value can be determined by how the manufacturer treats service parts, component reliability (high infant mortality through mid-life and low reliability), and adjustments to provide a “special policy” to parts or systems. Vehicle campaigns (i.e., recalls) due to safety, quality, etc. can significantly affect the residual value. Manufacturers can opt to extend Warranty coverage for components or systems but, it is not a requirement. Your customer should know that higher cost of ownership accompanies any new (major) technology advancements which will have minimal longitudinal field data to normalize the ownership cost.
3. Out of Warranty Component Replacement Cost – The cost of VE product high voltage components can very expensive (e.g., $800.00 – $8,000.00) depending on the component.
The typical Warranty for VE powertrain and energy storage systems (i.e., high voltage battery packs) is 8 years/100,000 miles. Some manufacturers have enhanced their warranty to 10 years/150,000 miles. So, if your customer is contemplating purchasing a preowned vehicle (that is out-of-warranty or very close to it), they should be aware of component part replacement cost and the associated diagnostic/repair labor costs. A service shop that is trained and equipped to diagnose and service VE systems can significantly assist the vehicle owner in minimizing the cost of ownership by providing lower cost service solutions to the owner.
4. Expectations of What a VE Product Is and Isn’t – VE products are designed to provide highly efficient operation at low, mid, and high torque and speed operation, and may or may not, provide great performance (i.e., speed, quickness, etc.) depending on vehicle type and geographic location.
For example, an HEV electric traction system provides minimal propulsion input while an engine may be providing most of the traction torque at high vehicle speeds. This would result in less vehicle performance when compared to other VE products such as, PHEV, EREV, and BEV products that use electric traction as the predominant system. Therefore, if the commute of your customer is predominantly city or suburban driving then, a VE product would provide a very efficient and fuel saving option, especially products that use electric only propulsion for most of the typical daily drive cycle.
5. Diagnostics may cost more if problems occur (especially when warranty has expired) – For an HEV product this is due to having two propulsion systems residing on one vehicle.
An HEV product contains the traditional internal combustion engine, fuel, ignition systems, etc. It also contains a complete electric propulsion system that can operate in tandem or separately from the engine. Therefore, the cost of diagnosing propulsion related problems can be extensive due to the time investment to analyze both propulsion systems. Although vehicle on-board diagnostics can assist with analyzing each system, the data may only lead to more questions and not answers because of the systems complexities.
However, if the customer is utilizing a service shop that has been trained in how to diagnose and repair VE products, this can significantly reduce the cost of repairs. Owners of VE products need to understand that, as of today few service businesses are trained and equipped to service these VE products, and the customer will need to identify qualified shops that can support their vehicle.
You can be a qualified repair professional that serves the unique needs of VE customers. FutureTech's NxtGen solutions provide a wide array of options for equipping, training, and supporting automotive service professionals who wish to serve the VE market. If you're unsure of the size of your unique market, we can provide you with a free report showing the number of vehicles in a specific area.
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