Fuel prices will be tipping point for U.S. electric vehicle consideration: DeloitteDOWNLOAD
New York, 18 April 2011 — A new survey released today by Deloitte shows that 78 percent of consumers in the United States would consider purchasing an electric vehicle (EV) when fuel prices reach $5.00 per gallon. The study, Gaining traction: Will consumers ride the electric vehicle wave?, surveyed 12,000 consumers globally, including more than1,000 in the U.S., and finds that the higher the price of fuel, the more interested consumers are in EVs.
“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 percent of consumers in the U.S. and 57 percent 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 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 percent, China 93 percent, Europe 69 percent, and Japan 48 percent). Looking exclusively at the potential first movers segment, only 12 percent of U.S. consumers surveyed identify themselves as potential first movers in purchasing or leasing an electric vehicle. China stands out with 50 percent of consumers falling into the potential first movers category, followed by Europe with 16 percent. Japan has the smallest percentage of consumers in the potential first movers segment with only four percent.
“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 (ICE) while only 8 percent are willing to pay a price premium of more than $3,000. Moreover, the overwhelming majority of these consumers (77 percent) 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 percent 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) from major automotive manufacturers. And, the expectations for the majority of consumers in these markets is a charging time of two hours or less (60 percent in the United States, 55 percent in China, 67 percent in Europe, and 81 percent in Japan) compared to the expected eight hour charge time (required using 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:
For more information about Deloitte’s Gaining traction: Will consumers ride the electric vehicle wave? please visit www.deloitte.com/electricvehicle
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.
Note: As used in this press release, “Deloitte” means Deloitte Touche Tohmatsu Limited member firms.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
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.