Deloitte Survey finds only 4% of global consumers likely to be satisfied with current EVs despite increasing consideration and willingness to buy; higher ICE fuel economy reduces interest in EVs
|The Deloitte survey found global consumer interest in EVs is high. Click to enlarge.|
Consumers’ expectations around the performance and purchase price of electric vehicles are so divergent from the actual offerings available today, that no more than 2–4% of consumers worldwide would have their expectations met, according to a new survey from Deloitte.
The survey, “Unplugged: Electric vehicle realities versus consumer expectations,” canvassed more than 13,000 consumers in 17 countries across the Americas, Asia and Europe and revealed a general desire among consumers to buy electric vehicles, but a strong unwillingness to compromise on key performance criteria and especially price.
In the United States, 12% of respondents indicate they would be a potential “first mover” when it comes to adopting an electric vehicle—with an additional 42% saying they “might be willing to consider” purchasing or leasing an electric vehicle. However, most global consumers, including those in the United States, would base their final decision on the greatest challenges associated with electric vehicles in the market today.: range, convenience to charge and purchase price of the vehicle. More than 85% of survey respondents ranked these considerations as “extremely important” or “very important” for buying or leasing an electric vehicle.
Vehicle range is clearly an issue among consumers. American consumers have the highest range expectations with only 63% satisfied with a range of 300 miles—despite the fact that 77% of American respondents said they drive only 50 miles or less per weekday.
The paradox here is that current technology targeted at the mass market can usually accomplish a range of 100 miles between charges, which is twice as far as the typical American drives each work day. Yet, for some reason, the 100-miles-a-day capability is still unacceptable to most consumers; they want at least 300 miles between charges.—Craig Giffi, vice chairman and automotive practice leader, Deloitte LLP
The survey also shows consumers want faster battery charge times. The majority of American consumers surveyed (58%) expect an electric vehicle to recharge its battery in two hours or less, and nearly one in four Americans (23%) expect a 30-minute charge time. Overall, in all countries, only a minority viewed up to eight hours (the normal time it takes to recharge the typical battery in today’s vehicles) as acceptable.
The more significant issue confronting automotive industry executives and policymakers around the world is unwillingness of consumers to pay much, if any, price premium for an electric vehicle. Specifically, consumers will not pay more for an electric vehicle than they currently pay for a comparable vehicle with a gasoline or diesel engine.
More than 50% of all consumers globally indicate they are unwilling to pay any kind of a price premium for an electric vehicle, which includes 65% of American respondents. Chinese consumers appear the most willing to pay a price premium, but even still, 44% indicate they will not pay anything extra. Consumers in the United Kingdom and Belgium are the most sensitive to paying a price premium with 71% opposing.
Complicating the price premium issue further is the low overall price expectations consumers have for an electric vehicle. In 11 of the 17 countries where the survey was conducted, 50% or more of consumers said they expect a price of $20,000 or less for an electric vehicle, far below actual costs. Consumers in the United States exhibit a good understanding of what electric vehicles will likely cost at the dealer with only 34% looking to purchase an electric vehicle for $20,000 or less. Nonetheless, 78% of American respondents expect to pay no more than $30,000 for an electric vehicle.
Automotive executives and policymakers trying to encourage the adoption of green personal mobility solutions face a dilemma: While current electric vehicle technology can satisfy a meaningful niche of consumers when it comes to range and charge time expectations, these consumers are unwilling to pay a price premium for this new and expensive electric vehicle technology.—Craig Giffi
The survey also shows consumers in the United States continue to see high fuel prices as a motivating factor for purchasing an electric vehicle. This summer’s national gasoline prices averaged around $4 per gallon, according to data from the US Energy Information Agency; this price point was consistent with what survey respondents would consider their tipping point on buying an electric vehicle. More than half (53%) of American survey respondents said a price point of $4 per gallon (an increase of approximately 10% over today’s gasoline prices) improves their likelihood of buying or leasing an electric vehicle. Around the world, on average, it would take nearly a 28% increase in local gasoline prices at the pump to result in a majority of consumers being more willing to purchase or lease an electric vehicle.
Conversely, the survey reveals that improvements in fuel efficiency for gasoline and diesel vehicles reduce the appetite for electric vehicles. Though the tipping points may vary slightly from country to country, the study found that more than half of consumers across the globe—57% in China and 68% in the United States—will be much less likely to consider purchasing an electric vehicle if fuel efficiency standards approached the 50 miles-per-gallon benchmark.
At 50 miles-per-gallon, the majority of consumers around the world lose interest in electric vehicles—and if today’s gasoline or diesel vehicles consistently hit 75 miles-per-gallon, interest in pure battery electric vehicles falls off the cliff.—Joe Vitale, automotive sector leader for Deloitte Touche Tohmatsu Limited
The irony in the Unites States is the higher Corporate Average Fuel Economy (CAFE) standards become, and the closer auto manufacturers come to meeting them by using a combination of more fuel efficient gasoline engines and electrified technology, the less interested consumers become in pure battery electric vehicles that use no gasoline.—Craig Giffi
The study also suggested that as consumers become more experienced with electric vehicles, new considerations for adoption—beyond factors such as range, convenience to charge, and cost to charge—will likely emerge, especially operating costs to maintain and repair the vehicle and total cost of ownership including considerations on residual value of the vehicle.
There is a clear disconnect between consumers’ expectations for electric vehicles and the actual capabilities and costs of technologies available in the market today. As consumers become more educated and as technology evolves, we certainly expect that gap to shrink, but neither will happen overnight.
For the time being, the mass adoption of electric vehicles is more likely to occur in countries that are willing and able to take an aggressive policy approach that encourages and subsidizes the market. And in today’s world, with so many sovereign debt challenges, that is very likely to be a road less traveled.—Craig Giffi