Assessing the attractiveness of the electric outboard propulsion market and development of a value proposition

Abstract

In a context of an emerging electric boating industry, our research aimed to assess the attractiveness of the electric outboard propulsion industry on pleasure boats in Europe and how a marine combustible engines incumbent such as Mercury Marine could successfully enter this market with products that customers are willing to buy thanks to a compelling Value Proposition. We analyzed the industry qualitatively through PESTEL and Porter’s five forces frameworks and quantitatively with primary data collection through cold phone calls (N=328), and conducted Customer Research with in-depth interviews (N=24) of boaters, marine dealers, and boat manufacturer in main European markets. Findings show that strong drivers across a range of domains create a favorable ground for the development of electric boating propulsion, that already represents about 22% units sold on the European outboard propulsion market, with a vast majority (87%) that are low-powered motors up to 5 kw. Current market offers a limited selection of mass produced electric outboard motors and is dominated by 2 players, Torqeedo as market leader, and E-Propulsion as challenger. We assessed that entering the high-powered electric outboard segment represents an opportunity space for Mercury Marine to earn first mover advantage in a Blue Ocean and highlighted several advantages of entering as quickly as possible the low-powered electric outboard segment. We proposed a distinctive Value Proposition for each of the 3 customer-segments, that provides boaters with a frictionless boating experience, allows boat manufacturers to distribute high-quality electric boats and helps dealers to operate as competent professionals and maximize their profit.