Monday, May 10, 2010

Idea for selling Electric cars

My comment posted on :

Idea for selling electric cars even at current prices:
1. A = cost of a fuel car of the same level.
2. B = fuel, + other oils, maintenance cost per month calculated depending on the customer's average driving distance.
3. C = Electric bill + maintenance cost per month if we replace the fuel with the electric car for the same distance.
4. D = Cost of electric car

Now, have a finance / EMI scheme wherein the customer pays in installments over a period of M months, such that
D = A + (B-C)*M

So for the customer, there is NO difference between having a fuel or electric car since the installments equals the fuel costs they'd have to bear. But after M months, they'll suddenly see themselves driving a car and not having any fuel expenses - whereas with their purportedly "cheaper" fuel car they'd be shelling out the dough for the whole life of the car.

So equate the fuel costs with installments and reduce the first price - There! We now have an electric car that's cheaper. I'll leave the calculations to you. I guess the value of M is key here, could you please calculate the payback period? Within reasonable limits, we can leave it to the customer to vary the installments they pay per month and so increase / decrease the value of M.

I don't think this is any original idea - for me it's a logical conclusion given that I'm replacing a high-monthly-cost product with a low-monthly-cost product. It's akin to moving from a rented residence to one I've bought. I don't think we even need to bring the environment into the picture when we try to sell this - the economics is attractive in itself.

1 comment:

Nikhil Sheth said...

good link:

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