## Deloitte global survey gauges consumer prospects for EVs in China, Europe and Americas; China leads

##### 19 April 2011

Deloitte Touche Tohmatsu Limited’s (DTTL) Global Manufacturing Industry group conducted a global survey to explore consumer adoption of electric vehicles (EVs). The online survey captures the views of more than 12,000 consumers across the Americas, Asia and Europe in 17 countries. It examines, among other things, how likely consumers would be to consider buying or leasing an electric vehicle when they buy or lease their next vehicle.

Broadly, the survey found that the majority of consumers’ in the world’s four largest automotive markets either identify themselves as potential first movers, or at least willing to consider purchasing an electric vehicle (China 93%, Europe 69%, US 54%, and Japan 48%). Looking exclusively at the potential first movers segment, only 12% of US consumers surveyed identify themselves as potential first movers in purchasing or leasing an electric vehicle. China stands out with 50% of consumers falling into the potential first movers category, followed by Europe with 16%. Japan has the smallest percentage of consumers in the potential first movers segment with only 4%.

According to the survey, the combined consumer expectations in China, the United States, Europe, and Japan for EV range are two to three times (320 to 480 kilometers or 200 to 300 miles) the current market offering (160 kilometers or 100 miles) from major automotive manufacturers.

Additionally, the expectations for the majority of consumers in these markets is a charge time of two hours or less (55% in China, 60% in the United States, 67% in Europe, and 81% in Japan) compared to the expected eight-hour charge time (required using Level II chargers with a 24 kWh battery pack) typical for current market offerings.

China. The survey, conducted among 1,163 consumers in China, coincides with the 14th Shanghai International Automobile Industry Exhibition (Auto Shanghai 2011) this week.

China’s 12th five-year plan will likely help to spur the development and adoption of electric vehicles. The plan anticipates growth of urbanization, an increase in research and development to 2.2% of GDP, and the reduction of carbon emissions by 17%. These factors are likely to create conditions that are ripe for EVs.

—John Hung, Managing Partner, Automotive Sector, Deloitte China

The survey shows a tipping point in terms of fuel prices that is influencing consumer adoption of EVs. Sixty-six percent of Chinese consumers surveyed say they are “much more likely” to consider an EV if the cost of fuel rises to 10 RMB a liter (US$1.53/liter,$5.80/gallon US). At 12 RMB a liter ($1.83/liter,$6.94/gallon US), the majority of respondents (85%) would be even more motivated to purchase an EV. However, if fuel consumption reaches 3.0 liters per 100 kilometers and lower (78 mpg US) in ICEs, 82% would be less willing to purchase an EV.

Global mass adoption of electric vehicles will be significantly influenced by a number of factors, including rising fuel prices, advancements in internal combustion engine vehicles (ICEs), and the availability of government incentives. While interest in battery electric vehicles (BEV) is growing, current market offerings generally fall far short of consumers’ expectations for driving range, charging time, and purchase price.

—Craig Giffi, DTTL Global Automotive Sector Leader

Additional findings from this survey include:

• Compared to consumers in other markets such as Europe, Japan and the United States, consumers in China appear to be more familiar with EVs. Almost all of the respondents were at least somewhat knowledgeable about EVs, with 42% being “extremely” or “very knowledgeable.” Among potential first movers, 63% said they were “extremely” or “very knowledgeable” about EVs.

• For more than 80% of respondents, convenience to charge, range, and cost to charge were all “extremely important” or “very important” considerations for buying or leasing an EV.

• The vast majority of respondents have requirements that are not currently met by pure EVs in the market today: Range of up to 320 kilometers (69% of respondents); charging time of two hours or less (55% of respondents); widespread availability of public charging stations (72 to 85% of respondents).

• Potential first movers in China described themselves as being environmentally conscious, tech savvy, trendsetters, and politically active. These early adopters are generally between the ages of 18 to 35 years old (50%) or 35 to 54 years old (49%), have a bachelor’s degree or higher (86%), are male (48%), live in urban areas, and are affluent (36% have incomes greater than 400,000 RMB or US$61,072). • Most survey respondents perceive EVs as better than ICEs in their impact on the environment (82%), availability of government incentives (76%), cost to operate (69%), cost of repair and maintenance (56%), and safety (53%). However, ICEs were seen as better in their range before refueling or recharging. • The most common perception was that EVs were “green and clean” (89%), while nearly two-thirds of respondents also perceived EVs as safe (68%), stylish (67%), and inexpensive to operate (65%). • Respondents said they would be most likely to use an EV for commuting to work (average 37% of expected driving time) or for short local trips (average 25% of expected driving time). • More than half (55%) of respondents said if they were to purchase an EV, the longest that they would be willing to wait to fully recharge the battery was two hours or less. And only 18% find eight hours of charge time acceptable. • The Full Useful Life of the battery, as well as ease and cost of switching batteries, are important factors to Chinese consumers as they begin to contemplate the total cost of ownership. Europe. The European component of the survey, conducted among 4,760 Europeans in seven countries, also shows that there is a tipping point in terms of fuel prices influencing consumer adoption of EVs. Sixty-three percent of the European consumers surveyed say they are “much more likely” to consider an EV if the cost of fuel rises to €2.00/liter a liter ($2.85/liter, $10.80/gallon US). As in China, if fuel efficiency reaches more than 3.0 liters per 100 kilometers in ICEs, Europeans would be less willing to purchase an EV. The majority (57%) of respondents who say they may be willing to consider an EV expect to pay the same or less for an EV than they do for a regular car: only about a quarter (24%) among the same group say they would be willing to pay a price premium of more than €1,500 (US$2,133). Moreover, the majority of these consumers (58%) expect to pay less than €15,000 ($21,333) net of government incentives. Additional findings from the survey of this segment include: • Potential first movers in buying or leasing an EV described themselves as being highly concerned about the environment, politically active, and trendsetters and tech savvy. Half of the respondents in this group were between the ages of 18 to 34 years (50%), more than half (57%) male, and almost half (46%) held a bachelor’s degree or higher. • In Germany and UK, potential first movers were less sensitive to fuel prices and much more willing to pay a premium for EVs than potential first movers from other countries. • More than 80% of European consumers surveyed said that convenience to charge, range, and the cost to charge were all extremely or very important considerations when buying or leasing an EV. • Three-quarters of European consumers surveyed (74%) said that before they would consider purchasing an EV, they would expect it to be able to travel 480 kilometers—much higher than what is currently available. • The Full Useful Life of the battery as well as ease and cost of switching batteries are important factors to European consumers as they begin to contemplate the total cost of ownership. • More than two-thirds (67%) of respondents said if they were to purchase an EV, two hours was the longest that they would be willing to wait to fully recharge the battery. • Most respondents saw EVs as better than internal ICEs in their impact on the environment, cost to operate, and availability of government incentives. But ICEs were seen as better in their range before refueling, convenience to refill as compared to recharge and purchase price. US. This segment of the survey also found fuel price to be a significant motivator—78% of consumers in the United States would consider purchasing an electric vehicle (EV) when fuel prices reach$5.00 per gallon.

However, more than half of US consumers surveyed are not willing to pay any price premium for an EV compared to a regular car (ICE) while only 8% are willing to pay a price premium of more than $3,000. Moreover, the overwhelming majority of these consumers (77%) expect to pay less than$30,000 net of government incentives.

Additional findings from the Deloitte survey include:

• Consumers in the United States are aware of EVs. More than half of American respondents say they are at least somewhat knowledgeable about EVs, with 11% extremely or very knowledgeable. Among potential first movers, 37% rate themselves as extremely or very knowledgeable about EVs.

• For roughly 90% of respondent’s convenience to charge, range, and cost to charge are all extremely or very important electric vehicle (EV) considerations.

• The vast majority of respondents have requirements that are not currently met by pure EVs in the market today, including range of up to 300 miles (63% of respondents; charging time of two hours or less (60% of respondents; and widespread availability of public charging stations (53 to 77% of respondents).

• Potential first movers in buying or leasing an EV in America describe themselves as environmentally conscious, tech savvy, trendsetters and politically active. These early adopters are generally between the ages of 18 to 34 years old (59%), educated (38%) with a bachelor’s degree or higher, male (60%), and affluent (43% have incomes greater than \$50,000).

• Most American consumers surveyed rate EVs as better than ICEs in their impact on the environment (78%), availability of government incentives (66%), and cost to operate (60%). However, ICEs rate better in their range before refueling or recharging (59%), purchase price (58%), and convenience to refill or recharge (56%).

• The most common perception is EVs are “green and clean” (72%) yet expensive to buy (71%).

• Of the total expected time US respondents say they would be driving an electric vehicle, most are likely to use an EV for commuting to work (average 37% of expected driving time) or for short local trips (average 25% of expected driving time).

• More than half (60%) of US respondents say two hours or less is the longest amount of time they would be willing to wait to fully recharge the battery if they were to purchase an EV. Only 23% of respondents find eight hours of charge time acceptable.

• The Full Useful Life of the battery as well as ease and cost of switching batteries are important factors to US consumers as they begin to contemplate the total cost of ownership.