Geneva, 9 March 2011 – A new survey released today by Deloitte Touche Tohmatsu Limited's (DTTL) Global Manufacturing Industry group shows that mass adoption of electric vehicles (EVs) is still a distance away. The survey, conducted among 4,760 Europeans in seven countries¹, comes on the heels of the 81st International Motor Show taking place in Geneva this week, where a number of automakers are showcasing various green technologies.

According to the survey, only 16 percent of European consumers identify themselves as "potential first movers," while 53 percent say they "might be willing to consider" and 31 percent say they are "not likely to consider" purchasing or leasing an EV. 

"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," says Craig Giffi, DTTL Global Automotive Sector Leader. "While interest in battery electric vehicles (BEV) is growing, with 69 percent of European respondents having identified themselves as either potential first movers or as might be willing to consider an EV today, current market offerings generally fall far short of consumers' expectations for driving range, charging time, and purchase price. As a result, we estimate only one to two percent of these consumers actually adopting battery electric vehicles by 2020."

The survey 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€ a liter. But, at the same time, if fuel efficiency reaches more than 3.0 liters per 100 kilometers in ICEs, they would be less willing to purchase an EV.

"For mass adoption, automakers will be challenged to price electric vehicles to meet the expectations of consumers while maximizing their margins," says Martin Hoelz, DTTL Global Automotive Sector Affinity Group Leader. "European consumers are not likely to want to pay a high price premium for EVs. This means that incentives such as tax reductions and exemptions, as well as bonus payments², will continue to be very important to the purchase decision."

¹Belgium, France, Germany, Italy, Spain, Turkey and UK
²"Electric Vehicles: Turning buzz into reality". European Automobile Manufacturers' Association (ACEA). http://www.acea.be/index.php/news/news_detail/electric_vehicles_turning_buzz_into_reality

The majority (57 percent) 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 percent) among the same group say they would be willing to pay a price premium of more than 1,500€. Moreover, the majority of these consumers (58 percent) expect to pay less than 15,000€ net of government incentives.

Currently, hybrids and BEVs represent a tiny fraction of total cars on the road globally. The adoption of all forms of green vehicles—hybrids, BEVs, etc.—will be significantly influenced by government policies that will heavily shape the portfolio mix of powertrain technologies in each country as discussed in DTTL's report, A new era. Accelerating toward 2020 – An automotive industry transformed. These policies will be driven by a number of factors from stricter carbon emission standards to independence from foreign energy.

Additional findings from the survey 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 percent), more than half (57 percent) male, and almost half (46 percent) 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 percent 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 percent) 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 percent) 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.

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Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's approximately 170,000 professionals are committed to becoming the standard of excellence.

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®, including 90 percent of the 30 global automotive companies. For more information about the Global Manufacturing Industry group, please visit www.deloitte.com/manufacturing.

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 captures the views of more than 10,000 consumers across the Americas, Asia and Europe. Within Europe, 4,760 consumers in seven countries—Belgium, France, Germany, Italy, Spain, Turkey and UK—were surveyed from 28 January to 10 February 2011. 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 consumer who would not be interested in buying or leasing an EV.

Country level data was normalized by the total adult population for each country to be representative of a pan-European demographic sample, adjusting for both differences in sample size at a country level as well as eliminating potential country biases in the computations not represented in the broader European demographic. As a result, countries with larger adult populations (of driving age) had a greater influence and contribution to defining the pan-European statistical results. The overall margin of error for the pan-European results is + 1.4%.

Related research

DTTL's report, A new era. Accelerating toward 2020 – An automotive industry transformed, examines the shape of the automotive industry as the world emerges from the global economic downturn. It captures the perspectives of Deloitte member firm senior automotive leaders worldwide on the industry situation today and in the future and focuses on the structural changes, customer trends, technology developments and workforce issues in the industry. For a copy of the report, please visit www.deloitte.com/anewera.

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