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
08 October 2011
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| 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
Resources
Nobody can or should be forcing people to buy electric vehicles - especially if there are many challenges with them.
Nobody is going to force me until EVs become as good as petrol of diesel fuelled vehicles. Besides other technologies - syhthetic liquid fuels, fuel cells etc will lead to a diversified vehicle mix which, like diversity of people is a good thing.
At the minute the bias towards electric vechicles as some sort of panacea is dangeous and excludes other technologies to flourish which could have benefits which are just as good, if not better than EVs. So lets avoid this techno-racism.
Posted by: Scott | 08 October 2011 at 06:28 AM
If 4% of all auto consumers globally want to buy a plug-in car at the current specifications and prices it means that there 40 million customers for EVs right now as there are over 1000 million car owners globally. By the time these first 40 million customers get their EV the plug-ins will have better specifications and lower prices than they have today and that will attract a larger number of customers and so forth until all cars have a plug.
I hope that my own city of Copenhagen will be the first megacity in the world to ban the use of combustion engines within 6 miles from the city center so that it will be the megacity with the least air pollution and the lowest number of air pollution related deaths and deceases per citizen. Copenhagen could implement that by 2020. To be sure, combustion engines should of cause not be banned but they should be required to be shut down whenever driving within 6 miles of the city center.
Posted by: Account Deleted | 08 October 2011 at 07:28 AM
Scott says what I think is the simple truth, with a fresh perspective.
Clearly the BEV is evolving much more slowly than we wish and need.
And no, making more is not the way to force the evolution.
Sadly, selling/buying more is not either.
Synergistic technological advances are the way
but reality easily outwits governments’ clumsy attempts at picking winners.
Posted by: ToppaTom | 08 October 2011 at 07:55 AM
Steve Jobs succeeded at Apple because he didn't listen to consumers, whose vision of what they wanted was constrained by what they already had. Most consumers see BEVs through ICE glasses -- hence the paradoxes Deloitte observed. Even though consumers drive less than 50 miles per day (and can recharge at home every night, overnight), they expect the same range as ICE vehicles, and presumably still think in terms of recharging at distant filling stations.
With ICE vehicles, of course you want a long range, not mostly because you need to drive that distance without stopping, but because you don't want to have to drive someplace to fill up every day. Refueling an ICE vehicle is very inconvenient, IMO. You want to do it as infrequently as possible, hence the need for long range.
As Henrik noted, there are plenty of people who understand the attractions of and are ready to buy BEVs over the next few years, without convincing any of the masses to participate. BEVs are elegantly simple, quiet, inherently reliable, and can be easily refueled at home inexpensively. But nobody is forcing anyone to buy them. Why should ICE fans feel threatened?
Posted by: ChrisL | 08 October 2011 at 08:46 AM
This study don't take into account the battery plus gasoline electric generator option like the volt, there is also the bmw i3 that is supposed to have this option. I always said that it take a gasoline electric generator to have a complete package. Battery only cars are marginal and will always be because every once in a while somebody, even if they do less then 50 miles as an average, needs to go farther. Just think weekends and vacations or winter use with traffic jams experimented in canada and north of usa and northen europe. Also if the battery can have a 300 miles range, then the recharge time get bigger, not a good thing on vacations. It's me that said to consumers that battery only cars is a mess and that survey show that i succeeded to convince the peoples of rejecting them. A green car should logically be better and cheaper to succeed, just think flatscreen tv that are cheaper and better and also computers and many other products. Now with these limps battery only cars sold at at premium then see what happened, these cars are rejected by consumers.
Only hydrogen fuelcells have a great future and fare well in consumer opinions and some car engineers and marketers but obama, cia, gm, ford, toyota, caterpillar, boeing, lockeed-martin, exxonmobil, wall-street dealers, democrats, republicans, europeen union, electric utilities, farmers, arms dealers, kaddafi, steven harper, greenpeace, chinese goverments, saudi-arabia, irak, iran, japanese goverments, swiss bankers, kgb, anthony kalazniskov, abc news, nasdaq, etc have opposed fuelcells and especially hydrogen gas because they have studied a little bit the subject of hydrogen transportation and concluded that it erase their jobs and revenues that are directly petrol sale or indirectly petrol sales also. Huge money amounts are dealed every day in astronomous quantities by petrol and these chaps including obama just want to continu with a petrol cartel and for their pr only are giving subsidies and law enforcement for battery only cars because they know that it's just pr and that battery will never displace petrol or so few that it don't count.
Posted by: A D | 08 October 2011 at 08:48 AM
People who buy BEVs during the next few years will either have a second ICE or HEV, or they will rent an ICE car for infrequent longer trips.
With current battery technology, if your daily mileage is less than 50 miles and you have a 100-mile BEV, it would be like driving around with 500 pounds of sand in your trunk, and paying $5000 extra for that privilege. The substantial extra weight needed for longer range will substantially impair acceleration, cornering, braking, and efficiency. Lighter weight means more fun driving; just ask Lotus.
Posted by: ChrisL | 08 October 2011 at 08:58 AM
"ICE fans" and those not blindly loyal to BEVs, are threatened because, as part of the 50% that pays rather than receives taxes, we shudder at the idea that the government should take our money and spend it on what the politicians think will get them re-elected and ChrisL thinks is best for others.
Is that any different or better than simple force?
Steve Jobs did not spend MY money, and his ability is the polar opposite of the politicians.
Posted by: ToppaTom | 08 October 2011 at 09:49 AM
I was trying to be kind when I said "think is best for others" but it's not in my nature.
I say we shudder at the idea that the government should take our money and spend it on what the politicians think will get them re-elected and what many KNOW is best for us all.
Posted by: ToppaTom | 08 October 2011 at 10:28 AM
How's that Socialism working for you and the rest of the sheeple, Henrik? What's after the "Fat Tax"? Do you really like your government confiscating half your check for their own personal agenda? Are they smarter and more responsible with your money than you are? How long ago did the Danes give up their freedom? They used to be such an independent people. Now they are drones. The market will sort all of this out.
Posted by: Larz Larzen | 08 October 2011 at 10:40 AM
TT - I think people should decide what is best for themselves. I have my opinions on what I like, and that is all my comments reflect. I don't care if the other 96% continues to buy ICEs. In any case, I know that nothing I say will have any impact on U.S. BEV policy or on what sort of cars people decide to buy.
As for politicians doing what will get themselves reelected, that is a given. I personally think political office should be limited to one term. However, with only 4% of the electorate willing to buy BEVs, I can't see financial support for those cars getting anyone reelected.
Politicians clearly think the oil industry is worth $billions in tax incentives, at least inasmuch as it apparently is rewarded by campaign contributions.
Perhaps they think that supporting the initial uptake of BEVs will ultimately reduce the billions of US consumer dollars flowing to foreign oil-exporting countries, or eventually making a dent in global climate change. Just my humble speculation.
Posted by: ChrisL | 08 October 2011 at 10:42 AM
One way to help ICE owners to make the switch would be to increase liquid Fed. fuel taxes by two or three cents/gal every time average ICE vehicles do one mile per gallon better. This way, the fuel tax would increase by 10 to 15 cents/gal/year for the following 10 years or so. ICE owners would not see the difference because the total weekly cost at the pump would be about the same.
The increased revenues could be used to fix road and bridges and to pay off part of the huge national dept.
Posted by: HarveyD | 08 October 2011 at 11:30 AM
@LL
Denmark is not a socialist society. We are a capitalist society with private ownership of everything. You are right about the high tax level. I believe it is the highest of any government in the world but the state also pay for free education and health insurance for everyone and the state help everybody that can’t make their own money so that they don’t have to live on the street. A Danish politician suggesting we abandon any of these three welfare items would not stand a living chance of being elected or reelected. It is the free will of the large majority of Danish voters to have a high welfare system in combination with high taxes. This is why people in Denmark are quite happy to pay their taxes although there is much discussion about how much the social insurance should cover and how much health care should be free. For example, the dentist is mostly self-financed as people can easily survive without any of their teeth left ;-)
About the ‘fat fax’ that tax is no different from our high taxes on tobacco and alcohol. We have a free health care system but there is a clear pattern that those who drink, smoke and eat too much fat also ends up overusing our free health care system so that in most peoples’ minds it is only just that you also pay more taxes for the goods that make you sick and in need of health insurance. We also recently introduced a special tax on refined sugar for the same reasons.
Danes have all the freedom in the world as we have a well functioning democracy and we generally respect most minorities for their points of views or ways of life. In some regards we are even freer than Americans. For example, when I was 7 years old I started to drive my bike to school every morning like any other kid in Denmark. In America if the parents sent their 7 years old kid to bike alone to school they would probably be arrested for child neglect because it is deemed unsafe. We have very little crimes in Denmark and nearly 100% of all serious crimes are investigated successfully with the guilty persons being brought to justice. Another example is that you are free to drink alcohol in public at anyplace in Denmark. In America you get arrested unless to stuff you alcoholic beverage into a brown paperback. Now that is stupid as everybody knows that people who drink from a brown paperback is having something with alcohol in it. Another example is Americans’ fear for nudity. In Denmark you can walk in public without a shirt on and that also applies for females that mostly are topless on the public beach. However, you are not allowed not to wear pants in public unless you are in a dedicated nudist area of which there are many in Denmark.
I could go on with other examples but the bottom line is that Danes are among the most liberated people in the world in all aspects of life and that is probably also why we always score among the highest points in international investigations about happiness. I have lived in other countries but I prefer the place I was born and most Danes think that way.
Posted by: Account Deleted | 08 October 2011 at 12:51 PM
It wouldn't matter the subject, the usual suspects use this site to vent their spleen on politicians , environmentally minded people or 'technologists seeking' answers.
They are boring spammers that should ask themselves why they persist in forcing their opinion every second line while spectacularly missing the point.
Such blinkered pursuance of their own agenda manifests in an inability to see the gold on these pages.
Of course we know that no amount of reference or dissent towards that style of 'contribution' will penetrate the blinkered brain .
It enamors the serious reader - not and the regular cries for more considered or subject related focus are testimony to just how boring it really is.
Most of us have better things to do (including considering the real topics brought forth on this forum)
I expect (but must be proved wrong , so) that my words will meet dogged resistance from those who wish to preserve their right to spam the rest of us half to death.
If you feel this may apply to you, ask yourself if you are more concerned with pushing your barrow over the rest or seriously interested and engaged with the subject.
It is understood that compulsive behavior is difficult to change as it is not seen to benefit the owners interest. So the rest will probably have to suffer you forever.
If you have read this far and agree that there is a lot of 'agenda' driven fat to be cut, why not indicate?
Posted by: Arnold | 08 October 2011 at 01:10 PM
Chris,
Where does the 4% figure come from?
One would think from the tone of some that the 'revolution' was over.
In fact of the countries surveyed the 'positive interest was >50%. It also shows a trend towards lesser interest at higher latitudes that may indicate consumer awareness of cold weather derating battery capacity.
@Henrick simply made the point that a 4% market uptake would translate to 40 million users from ~ < 1% ? a huge start with demand and sales off the chart.
That there are limitations with the current technology is understood not to a practical constraint as much as a concern to many prospective uptakers.
I would suggest that surveys as positive to the question would a huge encouragement to free thinking technologists and E buffs alike. It shows a willingness to accept the necessity for change.
Others make valid points that no one technology will meet every need.
One thing I would say is that environmental science is pointing to a future very constrained in either industrial pollution and environmental degradation OR ecosystem services.
The options will not extend to business as usual.
Posted by: Arnold | 08 October 2011 at 01:38 PM
@ Henrick,
We have it very similar in Aus, except the food is a bit tougher (evidently rather healthier) so we need a few teeth and we 'ride' our bikes or used to. Unfortunately the roads are less friendly and the auto is king (distances and all)
Too many of our beaches are underpopulated with topless ladies although it is quite acceptable to be so discreetly.
Would a ban on fugly topless be too insensitive?
Posted by: Arnold | 08 October 2011 at 01:51 PM
We seem to forget that the early ICE vehicles would only start half the time and would barely go more than 10 miles (at less than 20 mph) before failure.
ICE vehicles improved gradually and slowly in the last 120 years.
Why should we expect the early HEVs, PHEVs and BEVs to match and/or do better than evolved ICEs after 120 year?
Electrified vehicles should be give 15 to 20 years to do better than ICE technology. By 2020, BEVs will match many ICE and by 2030 BEVs will be king of the road.
Posted by: HarveyD | 08 October 2011 at 02:08 PM
I'm thinking that these surveys are basically worthless.
Are you going to report that you're going to switch to a cola/toothpaste that you haven't yet tasted?
People have no EV experience. For the most part they know no one who who has any EV experience. People are reacting to the anti-EV press which frequently waves the range/cost fear-flag.
The ICEV has evolved to be a very useful way to get around. Were it not for the rising cost of fuel (and climate change) most people would be quite happy sticking with their current car. Once EVs drop a few thousand dollars in price and oil gets more expensive and when we have Level 3 chargers along our highways then people's attitudes will start to shift.
These surveys? Terrible predictors of future behavior, IMO.
Posted by: Bob Wallace | 08 October 2011 at 02:16 PM
Arnold,
The 4% figure came from the title of the article, and I agree fully with Henrick that 4% is a huge number of people ready to buy BEVs during the next year or two. Polls are not a very accurate predictor of what people will actually do, so the actual number is not important. I agree with you that many more people will be taken with the technology after they have been exposed to it. I am actually excited by the emergence of brand new automotive technologies, mostly electric, but also including substantial advances in ICE design (although I will never buy another ICE).
If my enthusiasm was expressed with some reserve, it was because I did not want to inflame the rhetoric of those with conservative ideologies (spammers).
This web site has been my favorite because of the intelligent discussion by technically informed readers; I lament that it sometimes gives way to political ranting. I try not to let my comments stray in response to such distractions.
My opinions on politicians apply to the U.S. variety.
Posted by: ChrisL | 08 October 2011 at 02:23 PM
@Chris,
must confess didn't read the title. I did read the article though and stand by my question.
"Where the h did 4% figure come from?"
It doesn't agree with back of a stamp according to my reading of the article.
There are some classic old school nutters that are a bit of a curiosity too.
It would be good if they could get over much of the 'tuning up' part and start playing.
Posted by: Arnold | 08 October 2011 at 02:50 PM
@Henrik: Denmark sounds pretty nice--how young do you have to be to emigrate? I think I have a few ancestors from there...
Posted by: Nick Lyons | 08 October 2011 at 10:47 PM
FIRST LET US BE CLEAR PETROLEUM IS SCARCE AND WILL RUN OUT ONE DAY,IS SURPLUS IN 14 COUNTRIES ONLY OTHERS ARE AT THEIR MERCY, IT IS INCREASINGLY GETTING COSTLIER.
IT IS VERY POLLUTING. POOR COUNTRIES CANT AFFORD IT AND EVEN WEST WITH THEIR DECLINING STANDARDS WILL FIND IT HARD TO CONSUME,
WE ARE AT MERCY OF OPEC. TOO MAY PEOPLE WASTE A LOT OF FUEL IN SUVs WHEN WE CAN HAVE CARS GIVING 30 TO 40 KMS PER LITRE.(TOYOTO AQUA FOR INSTANCE AND GM BEAT)
SO WE NEED BIOFUELS, PLUG IN CARS, CNG,FUEL CELL CARS AND COMPRESSED AIR CARS WHAT EVER WORKS.
IF BIOFUELS SUCCEED RURAL WORLD WILL PROSPER.
Posted by: Account Deleted | 08 October 2011 at 11:46 PM
The study does not iclude EREV option.
I agree with Henrik - 4% is huge market. It is 4 milinion new cars sold annualy. The manufacturers should get more seriuos about new products.
Goverments should give incentives on that since old technologies tend locking out new inventions. And it realy takes time to become competitive.
I remember Danish wind fight. Actualy they sucseeded but it took nearly 40 years untill now windfarms are usual for our lanscape. I think it was worh starting and worth those resources Denmark devoted.
Posted by: Darius | 09 October 2011 at 12:51 AM
ChrisL and Bob got it right. I think many people still think too much in ICE patterns of use: drive until empty, then refill/recharge. As soon as they talk to people actually owning an EV and hearing and seeing how they go about it, they'll start to see the advantages of simply plugging in your car daily (perhaps at work too) and only having to stop at a gas station along the highway for a quick charge every now and then. And as such, the willingness to buy an EV does not just depend on the parameters of that EV, but the recharging infrastructure. It seems this survey ignored that simple fact.
@ToppaTom:
Clearly the BEV is evolving much more slowly than we wish and need.
And no, making more is not the way to force the evolution.
Well, for me the BEV is progressing much faster than I expected a few years ago. Some have sky-high expectations, and they will be disappointed. Their benchmark is innovation in computers, mobile phones and consumer electronics. However, if you compare it to the average pace of innovation in the car industry, the BEV is developing very fast.
And yes, making more IS a way to force evolution. More sales means more revenues means more money for research and a more attractive market for venture captial.
_____________________________________________________________
As for some here agressively pushing their political views, please take your discussions elsewhere. Some here lie in ambush to fire of an anti-government anti-tax anti-green anti-socialist barrage every now and then that adds nothing to the discussion. It is getting very tedious.
Posted by: Arne | 09 October 2011 at 03:58 AM
@Nirmalkumar
- lower case please.
You almost raise the problem that the wealthy countries will be able to afford and maintain very economical cars like the Aqua and other Hybrids / common rail diesels.
So if the price of oil goes up, they will be able to afford the cars.
The developing nations will not - they just don't have the cash.
On the other hand, developing countries often use the cars they have in much more intense ways, such as service taxis, where they are used as mini-buses (not minibuses).
If biofuels succeed, rural land owners will prosper and the rest will starve.
Efficiency is the key, and this can come from more efficient vehicles, and/or, more efficient usage patterns.
Posted by: mahonj | 09 October 2011 at 05:00 AM
In general, I think this report is reasonable. Most people simply cannot afford to pay a price premium, even though they would like to. So for the time being, EVs cannot be marketed to the most price sensitive portion of the market. This is where Th!nk and similar would-be low-end economical cars fail. They bring out a car that looks like, and has the features of a sub $20k car but costs much more.
However Tesla has it right. They are building just what this article says people want, a 300 mile range without a price premium. There is no price premium if you are competing against other cars in the same price market.
Just like flat screen TVs started at the high end of the market, it will take years for this technology to become cost effective for the low end consumer.
The "convenient charging" issue is only applicable to those who do not have their own dedicated parking space with overnight charge capability. This is a non-issue for the affluent market able to purchase to-days EVs.
Posted by: Roy_H | 09 October 2011 at 06:50 AM