Survey finds painful paradox hindering EV acceptance

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The paradox here is that current [electric vehicle] technology targeted at the mass market can usually accomplish a range of 100 miles between charges, which is twice as far as the typical American drives each work day. Yet, for some reason, the 100-miles-a-day capability is still unacceptable to most consumers; they want at least 300 miles between charges.” –Craig Giffi, vice chairman and automotive practice leader, Deloitte LLP

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The findings from global consulting firm Deloitte LLP’s survey of more than 13,000 automotive consumers across 17 countries in the Americas, Asia, and Europe, amount of one heck of a cold bucket of water on the burgeoning effort to boost sales of electric vehicles (EVs).

To put it bluntly, Deloitte’s research discerns that no more than a measly 4% of global consumers will likely be satisfied with either the cost or capabilities of today's EVs – despite these self-same consumers saying, in the very same study, that the current performance metrics, especially in terms of range, can meet their everyday vehicular operating needs.

Now that’s a painful paradox if there ever was one.

Deloitte’s survey – Unplugged: Electric vehicle realities versus consumer expectations – found that more than 85% of global consumers, including those in the U.S., would base their final EV purchasing decision on three key metrics: range, convenience of recharging, and purchase price.

Yet global consumers expect EVs to travel farther, require less recharging time, and cost far less than what automakers are offering today – with the divergence so great, according to Deloitte’s poll, that no more than 2% to 4% of them would see their expectations met.

Vehicle range is clearly an issue among consumers,” noted Craig Giffi, vice chairman and automotive practice leader at Deloitte. “American consumers have the highest range expectations with only 63% satisfied with a range of 300 miles — despite the fact that 77% of American respondents said they drive only 50 miles or less per weekday.”

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The paradox here, he added, is that current technology targeted at the mass market can usually accomplish a range of 100 miles between charges – which is twice as far as the typical American drives each work day. “Yet, for some reason, the 100-miles-a-day capability is still unacceptable to most consumers; they want at least 300 miles between charges,” Giffi (at left) pointed out.

On the positive side, the survey also found that U.S. consumers continue to view high fuel prices as a major motivating factor for purchasing an EV. In fact, when national gasoline prices averaged around $4 per gallon during the summer, according to data from the U.S. Energy Information Administration, survey respondents considered it a “tipping point” in terms of buying an EV.

Deloitte found that 53% of American survey respondents said a price point of $4 per gallon would improve the likelihood that they would buy or lease an EV vehicle. Indeed, around the world, on average, it would take nearly a 28% increase in local gasoline prices at the pump to result in a majority of consumers being more willing to purchase or lease an EV, the firm discerned.

Conversely, the survey reveals that improvements in fuel efficiency for gasoline and diesel vehicles reduce the appetite for EVs. Though the tipping points may vary slightly from country to country, the study found that more than half of consumers across the globe — 57% in China and 68% in the U.S. — will be much less likely to consider purchasing an EV if fuel efficiency standards approached the 50 miles-per-gallon benchmark.

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"At 50 miles-per-gallon, the majority of global consumers lose interest in EVs — and if today's gasoline or diesel vehicles consistently hit 75 miles-per-gallon, interest in pure battery EVs falls off the cliff," noted Joe Vitale, automotive sector leader for Deloitte Touche Tohmatsu Limited.

“The irony for the U.S. is that the higher Corporate Average Fuel Economy (CAFE) standards become, the less interested consumers become in pure battery EVs that use no gasoline,” added Deloitte’s Giffi.

Deloitte’s survey also showed that the majority of American consumers surveyed (58%) expect an EV battery recharge to take two hours or less, with nearly one in four Americans (23%) expecting a 30-minute recharge time period. Overall, in all countries, only a minority viewed up to eight hours – the normal time it takes to recharge the typical battery in today's EVs – as acceptable.

Perhaps the more significant issue is the unwillingness of consumers to pay much, if any, price premium for an EV.

“Specifically, consumers will not pay more for an electric vehicle than they currently pay for a comparable vehicle with a gasoline or diesel engine,” Giffi said. “More than 50% of all consumers globally indicate they are unwilling to pay any kind of a price premium for an EV, which includes 65% of American respondents.”

Interestingly, he noted, Chinese consumers are the most willing to pay a price premium, but even still, 44% indicated they will not pay anything extra. Consumers in the United Kingdom and Belgium are the most sensitive to paying a premium with 71% opposing higher prices for EVs.

Complicating the price premium issue further is the low overall price expectations consumers have for an EV, Giffi noted. In 11 of the 17 countries where the survey was conducted, 50% or more of consumers said they expect a price of $20,000 or less for an EV – far below actual costs.

That’s even about half of the $40,000-plus is costs for Chevrolet’s new Volt, an electric car equipped with a small gasoline engine to reduce recharging downtime.

Now, Deloitte’s poll did find that U.S. consumers are a bit more realistic, with only 34% looking to purchase an EV for $20,000 or less. Nonetheless, 78% of American respondents expect to pay no more than $30,000 for an electric vehicle.

"Automotive executives and policymakers trying to encourage the adoption of 'green' personal mobility solutions face a dilemma,” Giffi explained.

“While current electric vehicle technology can satisfy a meaningful niche of consumers when it comes to range and charge time expectations, these consumers are unwilling to pay a price premium for this new and expensive EV technology,” he said.

And that’s most definitely not music to the ears to those trying to get consumers to favor EVs in the near and long term.

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