Electric vehicles fall short of global consumer expectations, says Deloitte

8 November 2011

Consumers across the globe expect electric vehicles (EVs) to be able to go farther, on less charge time, for a lower price than automakers are currently able to offer, according to the findings of a new report from Deloitte’s Global Manufacturing Industry group.

The report entitled, Electric vehicle realities versus consumer expectations, is a global study designed to gauge consumer attitudes towards pure EVs. “Among the 13,000 consumers surveyed across the Americas, Asia, and Europe, there were found to be more similarities in expectations on EVs in the areas of range, charge time, and purchase cost than one might think,” said Craig Giffi, DTTL Global Automotive sector leader. “This can be valuable for automakers as they shape their plans to build EVs to appeal to consumers worldwide. The real challenge, however, is meeting global consumer expectations, which is significantly different to the realities of what EVs can deliver today.”

For more than 85 percent of the consumers surveyed, convenience to charge, and cost to charge were all deemed extremely important or very important considerations for buying or leasing an EV.

Consumer interest - Consumers living in the fast-growing and populous markets of India (59%) and China (50%) were more likely to consider themselves as potential first movers to adopt EVs. European consumers were found to be more reluctant to consider an electric vehicle: UK (11%), Germany (9%), Belgium (7%), France (5%), with greater receptivity in Turkey (40%), Spain (22%) and Italy (14%).

Charge time – Most of the consumers surveyed expected an electric vehicle to recharge its battery in two hours or less. Many, particularly in Japan, had greater expectations: 37% of those surveyed cited 30 minutes as the longest acceptable charge time. In the UK, 19% of those surveyed cited 30 minutes as the longest acceptable charge time. In all countries, only a small majority viewed eight hours – the longest time it can take to recharge the typical electric vehicle battery in vehicles today using a level 2 charger - as acceptable.

David Raistrick, UK Manufacturing Leader at Deloitte, commented: “Based on the survey results, consumer expectations appear to be inconsistent with current technology capabilities. We welcome the recent announcement that the European motor industry has agreed to adhere to a common system for charging any electric car across Europe. Currently, several different charging times are used across Europe. However, it would appear that there is still a long way to go before consumers are truly satisfied with the time it takes to charge a car. We hope that agreement can also be reached on a common charging plug for all cars regardless of model or location to further simplify the process. This would ultimately reduce costs for manufacturers and improve convenience for the consumer.”

Price premium – In almost every region, the majority of survey respondents indicated they would not be willing to pay a premium for EVs over a vehicle with a fuel engine. Of those who suggested they would pay a premium, few consumers were willing to pay much more than they would for a traditional car. UK and Belgian consumers seemed to be the most price sensitive, both with 71% of respondents expecting to pay the same price or less for an electric vehicle.

Raistrick commented: “Based on the survey results, consumer expectations of the price of electric vehicles appear to be inconsistent with current technology capabilities. The current retail price for an electric vehicle is largely due to the battery, which can represent up to 50% of the cost of the vehicle. A significant portion of the cost of the battery would likely need to be subsidised, potentially by industry or government, if EVs are to be cost competitive with traditional ICD vehicles.”

Fuel price – “The price of oil obviously has a significant impact on the overall adoption rate of EVs. Though fuel prices for consumers vary widely around the world and despite the actual current price at the pump, UK consumers indicated that their interest in EVs would be stimulated by higher gas/petrol prices.

As consumers become more experienced with EVs, new considerations for adoption, beyond factors such as range, convenience to charge, and cost to charge will likely emerge. Operating costs to maintain and repair the vehicle and total cost of ownership, including considerations on residual value of the vehicle, will likely be pertinent considerations. A number of factors will have an important influence on global consumers’ adoption of EVs. Government policies, fuel price trends, electric utility infrastructure, and alternatives will all play a role, but it is government policy that will likely shape and potentially accelerate or decelerate the adoption rate of EVs over the next decade and beyond.

“I have little doubt that EVs will play an important future role both in the UK and globally. As take up increases, so will the strain on our electricity infrastructure. I would therefore urge the government to start planning today for additional electricity generating capacity. Without this, the UK will find over the next decade that our take up of EV’s is hampered by our inability to power them,” said Raistrick.

For a copy of the report Unplugged: Electric vehicle realities versus consumer expectations please click here.

-Ends-

Notes to editors:

Global electric vehicle research
DTTL’s Global Manufacturing Industry group conducted a global survey to explore consumer adoption of electric vehicles (EVs). The online survey conducted between November 2010 and May 2011 captures the views of more than 13,000 consumers across the Americas, Asia and Europe in 17 countries – Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Korea, Spain, Taiwan, Turkey, United Kingdom, and the United States. 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 asked respondents, among other things, how likely they would be to consider buying or leasing an electric vehicle when they buy or lease their next vehicle (assuming that electric vehicles were readily available) and how likely they were to actually buy or lease an electric vehicle. The research analyzed the characteristics and opinions of three groups based on their purchase interest: Potential first movers are consumers who are most likely to buy or lease an EV; Might-be-willing to consider are consumers who are interested, but less likely to consider an EV; and Not likely to consider are consumers who would not be interested in buying or leasing an EV. The margin of error for survey results about the total sample was one percent at the 95 percent confidence level. The margin of error was higher for survey results about sub-groups within the sample.

Deloitte Touche Tohmatsu Limited Global Manufacturing Industry group
The Deloitte Touche Tohmatsu Limited (DTTL) Global Manufacturing Industry group is comprised of more than 750 member firm partners and 12,000 industry professionals in over 45 countries. The group’s deep industry knowledge, service line experience, and thought leadership allows them to solve complex business issues with member firm clients in every corner of the globe. Deloitte member firms attract, develop, and retain the very best professionals and instill a set of shared values centered on integrity, value to clients, and commitment to each other and strength from diversity. Deloitte member firms provide professional services to 84 percent of the manufacturing industry companies on the Fortune Global 500®. For more information about the Global Manufacturing Industry group, please visit www.deloitte.com/manufacturing.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

Last Updated: