When approaching a market sizing case for two segments, such as people who don't have electric vehicles (EVs) and people who already have diesel cars, it's important to consider the unique characteristics and behaviors of each segment.

For the segment of people who don't have EVs, we can start by analyzing the population size and demographic factors that are relevant to their potential adoption of EVs. This may include factors such as income levels, geographic location, and access to charging infrastructure. By understanding the target population and their preferences, we can estimate the potential market size for EVs within this segment.

On the other hand, for the segment of people who already have diesel cars, we need to consider their willingness to switch to EVs. This may involve assessing factors such as their awareness of the environmental benefits of EVs, their attitudes towards sustainability, and any incentives or regulations that may influence their decision-making. By understanding the motivations and barriers for this segment, we can estimate the potential market size for EVs within the existing diesel car owners.

To approach this case, we can follow a two-step process:

Segment analysis: Begin by segmenting the overall population into the two segments - people who don't have EVs and people who already have diesel cars. Analyze the relevant characteristics and behaviors of each segment to understand their potential adoption of EVs.

Market sizing estimation: For each segment, estimate the market size by considering factors such as the total population, the percentage of people likely to adopt EVs, and any other relevant data points. This estimation can be done separately for each segment and then combined to provide an overall market size for EVs.

It's important to note that the specific data and assumptions used in the estimation will depend on the context of the case and the available information. Therefore, it's crucial to gather relevant data, make reasonable assumptions, and clearly communicate the rationale behind your calculations.

By approaching the case in this manner, we can gain insights into the potential market size for EVs within both segments and develop a comprehensive understanding of the overall market opportunity.

Hi there,

It seems as though you're following a bottoms-up approach by focusing on the individual and their preferences (as opposed to a top-down approach starting with a certain number of cars and introducing a transition rate to EVs for example).

Can you explain what exactly you have so far so we can give feedback? Without seeing what you have already, it's impossible to tell.

Cheers
Moritz
___________________________________________________
>> Need a senior McKinsey coach? 
     See my full profile 
>> Need real McKinsey cases?
     Zero Carbon Mine (hard)
     Car Convenience (Intermediate + brand new)

Hi!

It doens't have to be a blindspot. Not sure what you mean by that. Could you please lay out your current approach? Happy to provide some feedback afterward. 

Aside from this, as a side tip, ChatGPT is super useful when practicing for market sizing exercises. You can even ask it for alternatives of sizing something so you understand how to approach the problem differently (e.g., top down vs bottom up).

Good luck!
Cristian

Before answering, I would actually question WHY is that a good segmentation. It is not clear to me that it is useful in this case.

Both are a matter of how many do you expect to buy a NEW car next year, and how many of these will be EVs. One could apply different %s to each segment, depending on why you think that segmentation is relevant.