EVs remain expensive, range limited technical curiosities, whose meager sales in the U.S. are thus far propped by lavish taxpayer subsidies. Even with $7,500 or more on the hood, sales are measured in the hundreds a month.
The study, “Gaining traction: Will consumers ride the electric vehicle wave?” surveyed 12,000 consumers globally, including more than 1,000 in the U.S., and finds that the higher the price of fuel, the more interested consumers are in EVs.
Interest or consideration is an important precursor to actual electric vehicle sales, but while EV consideration is a necessary condition it is not sufficient to tip the balance in favor of electric vehicles as customer expectations are wildly out of touch with EV reality.
EVs remain expensive, range limited technical curiosities, whose limited sales in the U.S. are propped by lavish taxpayer subsidies. Even with $7,500 or more on the hood, sales are measured in the hundreds per month.
“Offsetting the fuel factor is the finding that the better the fuel efficiency of internal combustion engine (ICE) vehicles, the less interested consumers become in EVs,” said Craig Giffi, vice chairman, Deloitte LLP and U.S. automotive practice leader. “A total of 68% of consumers in the U.S. and 57% in China are less likely to consider an EV if they are able to find ICEs with a fuel efficiency of 50 miles per gallon.”
According to the Deloitte survey, 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 (U.S. 54%, China 93%, Europe 69% and Japan 48%). Looking exclusively at the potential first movers segment, only 12% of U.S. 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 number of consumers in the potential first movers segment at only 4%.
“For mass adoption, automakers in the U.S. will be challenged to price electric vehicles to meet the expectations of consumers and still make a profit on them,” said Giffi. “U.S. consumers are not likely to pay any sort of price premium for EVs. Therefore, government incentives are very important to the purchase decision.”
More than half of U.S. consumers surveyed are not willing to pay any price premium for an EV compared to a regular car (internal combustion engine) 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. In Europe and China however, it becomes an even more significant challenge as the majority of consumers expect to pay less than $20,000 for an electric vehicle and more than 50% of consumers in these markets refuse to pay any kind of price premium for an electric vehicle.
“Global mass adoption of electric vehicles will be significantly influenced by a number of factors, including rising fuel prices, advancements in ICEs, and the availability of government incentives,” adds Giffi. “While interest in electric vehicles is growing, current market offerings generally fall far short of consumers’ expectations for driving range, charging time, and purchase price.”
The Deloitte survey reveals that consumer expectations, when combined in China, United States, Europe and Japan for EV range, is two to three times (200 to 300 miles) the current market offerings (100 miles at best) from major auto manufacturers.
And, the expectations for the majority of consumers in these markets is for a charging time of two hours or less (60% in the United States, 55% in China, 67% in Europe, and 81% in Japan) compared to the expected eight hour charge time (required when using expensive Level II chargers with a 24 kWh battery pack) typical for current market offerings.
Currently, hybrids and EVs represent a tiny fraction of total cars on the road globally. The adoption of all forms of green vehicles—hybrids, EVs, etc—will be significantly influenced by government policies that will heavily shape the portfolio mix of powertrain technologies in each country. These policies will likely be driven by a number of factors, from stricter carbon emission standards to independence from foreign energy.
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 respondents, 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 internal combustion vehicles in their impact on the environment (78%), availability of government incentives (66%), and cost to operate (60%). However, internal combustion vehicles 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 U.S. 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 U.S. 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. While 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 U.S. consumers as they begin to contemplate the total cost of ownership.
About the Survey
The survey was commissioned by Deloitte and conducted online by Bayer Consulting. The survey captures the views of more than 12,000 consumers across the Americas, Asia and Europe in 17 countries. To qualify for the survey, potential respondents had to be 18 years of age or older and to have a driver’s license. The survey has a margin of error of +/- three percentage points.
