Got asked this question for a market sizing interview that threw me off - I had never seen an example that made you estimate a proportion. I thought it was interesting to share this, as well as the approach I used and the approach that interviewer suggested. It would be great to hear what the community thinks of these approaches and any other ideas!
Assumptions: no hybrid cars, no commercial cars, 4-wheeled cars
Approach 1
Weighted average of the proportion of electric cars in city areas and in rural areas
- find number of people in UK in city and in rural areas
- find number of cars per person
- find proportion of electric cars in cities (based on personal experience) and in rural areas (proportion of that in cities)
- multiply the numbers with a weighted average of the number of cars
Approach 2
Assume it is a newly-formed market and use sales of electric cars to derive current proportion
- decide the year in which first sales of electric cars were made
- find yearly increase in proportion of yearly sales that were electric cars
- assume that age of market is less than average replacement rate - add all electric cars that were old as a proportion of all cars sold, which means that total cars sold since market started is equal to the current number of electric cars (no need to convert from percentages to numbers)
- find total numnber of cars in the UK in terms of sales per year (using replacement rate)
- divide numebr of electric cars (in terms of x) over total number of cars
