Deloitte Global consumer study examines the auto industry’s future in Europe

• Interest in alternative engines is growing rapidly across Europe as people look to hybrids.
• Consumer perceptions regarding the safety of self-driving vehicles, and the benefits of vehicle connectivity, vary significantly by country.

NEW YORK, NY, USA, 27 February 2020—The 2020 European edition of Deloitte Global’s Automotive Consumer Study finds that interest in electric vehicles is accelerating across the region. It also reports that consumers are losing trust in the ability of traditional auto manufacturers to bring automated vehicles to market; instead, they are looking to technology companies and new players to take the lead.

“Stakeholders across the automotive industry are facing a significant challenge as consumer skepticism regarding some advanced technologies, such as self-driving vehicles, continues to develop,” says Joe Vitale, Deloitte Global Automotive Sector Leader. “Automakers need to rationalise capital allocation to ensure they can generate sustainable returns on invested capital as consumers shift gears to the realities of electrified vehicles.”

The Automotive Consumer Study provides insights into a variety of critical issues impacting the automotive sector. It is based on surveys from more than 35,000 driving-aged consumers in 20 countries around the world. Approximately 10,000 consumers from Austria, Belgium, France, Germany, Italy, the Netherlands, and the UK contributed their views for the European edition.

“Although interest in alternative powertrain technology continues to expand as fewer people want traditional internal combustion engines in their next vehicle, consumers in most countries are not willing to pay much more for an electric vehicle,” adds Thomas Schiller, European Automotive Leader, Deloitte Germany. “However, stricter CO2 limits in Europe and associated fines for automakers will shift the economics in favour of electric vehicles.”

Significant findings of the study:

• Demand for electrified vehicles accelerates: Automakers still have reason to invest in developing new powertrain technologies. Desire for alternative-fuel vehicles is rising in several European markets, and in many countries policy makers are implementing stronger environmental policies. Interest in alternative powertrain technology grew fastest in the UK, where 52 per cent of consumers said they are actively considering an alternative-fuel vehicle (including hybrid electric, and battery-powered electric) in the future, up from only 37 per cent last year.
• Opinions on EV battery range and charging infrastructure are mixed: Despite electric vehicle (EV) technology improving each year, consumers still need to be convinced that battery range and charging infrastructure is worth their EV purchase. Even though the average vehicle owner only travels about 40 kilometers per day, most European consumers believe full battery vehicles should have a range between 320 and 640 kilometers. At the same time, a significant proportion of European consumers are willing to spend no more than 30 minutes waiting for their electric vehicle to fully charge.
  European consumers vary in their opinions on who should be responsible for building EV charging networks. Around one-third of respondents think the government is responsible for building publicly accessible EV charging stations and other infrastructure. Survey respondents in Italy and Austria, 39 per cent and 31 per cent respectively, think that electric utilities are responsible for building EV charging infrastructure.
• Interest in autonomous vehicles stalled in most countries: Consumer perception regarding the safety of self-driving vehicles has stalled since last year, with 25 per cent to 50 per cent of respondents believing that autonomous vehicle (AV) technology will not be safe. In Belgium and the UK, the percentage of people who think AV will not be safe has increased to 50 per cent and 49 per cent, respectively. This trend goes hand in hand with consumers’ views on AV testing, with 40 per cent of consumers in Belgium and over half of consumers in the UK (52 per cent) who are concerned by the idea of autonomous vehicles being tested in areas where they live.
• Decline of consumer trust in OEMs to bring AV technology to market: In several markets across Europe, consumer trust in traditional manufacturers (OEMs) to bring AV technology to market continues to decline. In France and Italy, trust in OEMs decreased to 35 per cent, with percentages even lower in the UK (33 per cent) and Austria (26 per cent). At the same time, trust in existing technology companies continues to grow, with the notable exception of Germany and Austria, where trust in existing technology players decreased. Across the region, trust in new players that specialise in autonomous vehicle technology also inched up.
• R&D continues despite consumers’ reluctance to pay for AV technology: OEMs continue to spend billions on research & development (R&D) in advanced vehicle features, with the assumption that consumers will pay a premium for these. However, results from this year’s study reinforce past findings that achieving a return on invested capital for new technologies may be more difficult than some automakers think. Consumers’ willingness to pay at least something for AV technology has increased over the last few years, although it may still not cover the costs required to develop and deliver the technology.
• Vehicle connectivity, privacy, and data security concerns remain: European consumers are split on the benefits of increased connectivity in vehicles. Consumers in Italy (63 per cent) are embracing the idea at nearly twice the rate of Austria (33 per cent), followed by Germany (36 per cent). Opinions also differ on specific concerns around connectivity, including the security of biometric data generated and shared by connected vehicles. In Italy, where consumers believe increased connectivity is beneficial, just around one third (36 per cent) have concerns about privacy and data security; generally, however, concerns are high among the majority of other countries. Additionally, consumers are not decided on who they trust to manage the data being generated and shared by a connected car. OEMs are not necessarily their choice, with less than one third of consumers in most countries selecting OEMs for this role.