• Jun 17th 2010 at 7:49PM
  • 15
Here's a few things that could happen tomorrow: The Earth
could fall out of orbit, AutoblogGreen could go an entire day without some riled-up debate over the future of electric vehicles (EVs) and the heated discussions of battery-powered versus hydrogen cars could come to an end. All of this could happen, but it's not gonna and we're willing to bet on it. It turns out that Ernst & Young wants to add another outlandish claim to our could list. As E&Y suggests, some 50 million people could buy an electric vehicle by the end of 2011. If these 50 million, or even a fraction of them actually purchase an EV, then E&Y states that demand will far exceed supply.

We could just leave it at that, but being the nice guys that we are, we'll try to help out E&Y a bit and explain the results. E&Y surveyed 4,000 people across several countries and found that more than 25 percent of those surveyed would consider buying an EV and seven percent said they would definitely consider buying an EV. E&Y then took the seven percent number, tracked down the total amount of registered drivers in each country and calculated seven percent of the number of total registered drivers. This led to the 50 million mark referenced above.

That's about as much help as we can give to E&Y. Its survey methods and assumptions appear dead wrong to us. Why, you ask? Well that's an easy one. "Definitely consider" does not translate into an actual EV purchase. Would you definitely consider a Ford product for your next car? Even if you answer yes, it doesn't mean you'll end up buying one, right? You might just end up with a Toyota instead. It's not so much the flawed reasoning, but more the conclusion that E&Y comes to that irks us, "Global demand for electric cars could outweigh near-term supply." Yep, it could, but supply could just as well outweigh demand too. We could add in all kinds of reasons why outlandish claims are bad for an emerging industry, but we're sure that you guys and gals can cover that. So, read the report found after the jump and have at it.

[Source: Ernst & Young]


Global demand for electric cars could outweigh near-term supply
Ernst & Young survey suggests 25% of drivers across markets would consider investing in new powertrain technology

Detroit, 16 June 2010 – Over 25% of drivers surveyed across US, Europe, China and Japan said they would likely consider purchasing plug-in hybrid (PHEVs) or electric vehicle (EVs), as soon as they become available on the market, according to research by Ernst & Young's Global Automotive Center. The report canvasses the views of a thousand licensed drivers in each of these regions to gauge consumer awareness and interest in alternative powertrain technologies.

Nearly 7% of respondents globally indicated they would definitely consider buying a PHEV or EV. Applying each market's percentage of those who said they would definitely buy to the number of registered drivers in each region results in a potential early adopter group of approximately 50 million drivers globally, over half of which are in China.

Commenting on the findings, Mike Hanley, Ernst & Young Global Automotive Leader, said, "As the survey suggests, PHEVs and EVs have an opportunity to make a significant entrance into the global automotive market over the next few years. Even if only a small portion of survey respondents who said they would definitely consider one of these vehicles are serious, there would still be more than enough demand to sell out the estimated 2010 and 2011 production runs of the major and new vehicle manufacturers."

Regional paradox
While collectively across these geographies there is a relatively positive response to these vehicles, attitudes vary significantly between individual markets.

In the US, for example, the level of awareness toward alternative powertrain technologies is higher than in any other market. However, this awareness does not translate into a higher proportion of drivers who would consider purchasing. Of those surveyed, 17% said they would never consider purchasing a PHEV or EV, and 70% would be unlikely to purchase until the vehicle is well-established in the market.

On the other hand, in China, familiarity with the technologies is the lowest of all the regions, but respondents are by far the most willing to purchase a PHEV or EV when it becomes available. A striking 60% of respondents said they would most likely or definitely considering purchasing such vehicles, far more than in any other market. Only 4% of Chinese respondents would never consider purchasing a PHEV or EV.

In Japan however, almost 20% of respondents claim they will never consider a PHEV or EV, and the percentage of early adopters is the lowest of all the regions (3%). Similar results are observed in Europe, with 13% and 5%, respectively.

Hanley adds, "The results reveal the more mature automotive markets are more skeptical of the new vehicle technologies. China on the other hand shows more dynamic characteristics, perhaps because of its shorter exposure to internal combustion technology, with the result being Chinese consumers are less wedded to it."

Economics and environment drive decisions
Across all markets, fuel savings (89%), environmental impact (67%) and government incentives (58%) were the three most cited factors that would favorably influence drivers to purchase a vehicle with new technology. By market, fuel savings saw the highest response in the US (92%), followed by Europe (89%), Japan (88%) and China (86%). China's respondents rated environmental impact higher than in any other market (82%).

"This indicates that while the environment and other factors are on consumers' minds, new technology has to make economic sense," said Hanley.

Road blocks to technology adoption
The survey also reveals that the significant factors making drivers most hesitant when choosing a PHEV or EV as their next new vehicle are access to charging stations (69%), price (67%) and battery driving range (66%). US drivers are more hesitant over access to charging stations (75%) and price (74%) than drivers in other regions.

"One of the key findings in this survey is that several factors equally contribute to hesitation towards new technology. Factors holding back potential buyers vary widely across these markets, which implies that distinct marketing strategies need to be designed in each market to address the diverse concerns," added Hanley.

Jeff Henning, Ernst & Young Global Automotive Markets Leader, commented, "It is clear that to sufficiently address these factors, collaboration among automotive companies, infrastructure developers, new suppliers, governments and other entities is required to fully support the successful launch of these vehicles."

About the Global Automotive Center
Ernst & Young's Global Automotive Center in Detroit, Stuttgart, Shanghai and Tokyo is focused on the mega trends in the global automotive industry. It brings together a team of professionals to help you achieve your potential - a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately it enables us to help you meet your goals and compete more effectively. It's how Ernst & Young makes a difference.

About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

For more information, please visit www.ey.com.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

The Ernst & Young organization is divided into five geographic areas and firms may be members of the following entities: Ernst & Young Americas LLC, Ernst & Young EMEIA Limited, Ernst & Young Far East Area Limited and Ernst & Young Oceania Limited. These entities do not provide services to clients.

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    • 1 Second Ago
      • 5 Years Ago

      Damn Lies...

      {sigh}... nevermind, just forget it.
        • 5 Years Ago
        69.99% of statistics are made up
      • 5 Years Ago
      If they develop EV's with waste radioactive material that converts all the radiation to electricity and allows the cars virtually unlimited range... That is the only way I see them getting to this 50 mil number.

      I don't believe that there are that many hobbyists and people fed up with Big Oil. Well, maybe there are 50 million people fed up with the oil companies and countries around the world...
        • 5 Years Ago
        I wonder if they told people the cost before tax credits.
      • 5 Years Ago
      "E&Y then took the seven percent number, tracked down the total amount of registered drivers in each country and calculated seven percent of the number of total registered drivers. This led to the 50 million mark referenced above."

      My god, that's just dumbassery taken to a whole new level. Even I, with no actual education in statistics, can see that this is galactically stupid.

      Every last registered driver is not going to buy a car next year. Go find yourself some real statistics.
      • 5 Years Ago
      It's possible. Those 50M could be in China alone.
      • 5 Years Ago
      I actually see the hydrogen car talk dying down. still some occasional spastic claims from GM and toyota about 2015 fictions and the odd proponent that when prompted feels the need to stand up for what Jeremy Clarkson has told him, but I think it's fading away. like Hummer.
      once the douche automakers get into making proper plugin series hybrids with tiny generators then it's done.

      as for 50 million by 2011, that's about 100% of the new car sales in all the western world isn't it? so that seems a tad unlikely :)
      especially since there is only a couple of models late 2010 and nowhere near that volume.
      but it's not totally useless information anyway. just think of it as the opinion poll that it is.
      and with the right config they'll buy it. and not just 50 million. all of them.
      • 5 Years Ago
      HELLO!!! Did ANYONE at ABG even bother to read the Ernst & Young press release? Their survey specifically says that according to thier survey 7% of drivers "would definitely consider buying an EV". 7% of worldwide drivers=50M. They then speculate that the entire 2011 run of these types of cars might sell out. That's it! Absolutely no prediction of 50M cars on the road by next year. In fact, it's an incredibly bland and boring press release not worthy of ABG's sensationalist post.

      Must have been a REALLY slow down at the office...
        • 5 Years Ago
        "Must have been a REALLY slow down at the office"

        If it were a slow day, they would have had time to read the survey. The reality is, they'd just rather rush sensationalistic headlines to their "blog" and don't give a crap about journalistic integrity.

        "would definitely consider buying an EV"

        I've always liked these kinds of answers. They don't mean shit! I'm surprised the number that would "consider" buying an EV isn't 93%. Just because you consider something, doesn't mean you won't quickly dismiss it.

        I've considered all kinds of things that I'd never do. :)
        • 5 Years Ago
        You're being an intelligent consumer?!? "Say it aint so, Joe!" he he. Couldn't resist that one.

        Of course you're all right about ABG sometimes pumping up a little controversy. That's the nature of the beast, though, and I'm not willing to throw the baby out with the bathwater. The amount of hyped up articles with no legitimate content is very small compared to the wealth of info on a wide variety of topics. This E&Y survey should be taken as just another data point, along with the (flat out wrong) surveys that say BEVs will not number over 2 million by 2020. Surveys can be bought and paid for, tailored to a certain outcome. That's why the survey companies never reveal the questions they asked and the statements that they make prior to asking them. You can, indeed, get a survey to return any answer you want so they should all be taken with a grain of salt. Who was asked, how were they selected, where did the survey take place, what medium did the survey use (telephone surveys will exclude young people as they generally do not have land line phones for instance / email surveys may exclude a significant percentage of the poor or elderly, etc).

        You'll very rarely see me even reading the articles about a new tweak to internal combustion that will do {something} blah, blah, blah. My focus has moved beyond the internal combustion engine. As I posted here several months ago: there will continue to be minor improvements in ICE technology but in my mind it is a dead end and therefore of no interest to me. Likewise the articles about the latest shiny combustion vehicle; not interested, don't care, you couldn't MAKE me care. But some people want to read about improvements in ICE technology and it has a tie in to "green" if the vehicle reduces emissions or increases mpg from the previous version. I'm not forced to read those articles.

        But the thing that is great about ABG is the diversity of interests that they serve and the richness of the community that follows (and posts) regularly. Of the trolls who jump in on their favorite little bailiwick once in a blue moon I couldn't care less about their opinion but I value the interaction with people here, even those who have a different opinion than I. I've learned a lot from the give and take. I wouldn't recommend that ABG narrow its target audience.
        • 5 Years Ago
        Surveying people who have never test drove a product... and asking whether or not they would "consider" it.

        It is meaningless. Why people conduct a survey? Because they are paid to do so.

        Surveys are bought and paid for to show exactly the results the "sponsor" wants to see.

        Quick, I will give a dollar to anyone who can prove my toothpaste is recommended by dentists.
        • 5 Years Ago
        That's what they do here, and post about a few extra MPG on a 5000 lb SUV and other junk pseudo green posts. Perhaps they will begin to write real posts, the comments are more interesting and informed.
        • 5 Years Ago
        Uhh.... did you guys read the study? It's basic math. The main points seem to be there is significant interest, it varies by locale, and there are opportunities for entry points into the business for companies that succeed in creating good products in the space. Shouldn't you be happy when solid research confirms conclusions that support the cause? Or are you encouraging them to move away from independent, sound research and towards agenda-driven, biased statistics just for the sake of being sensational?
      • 5 Years Ago
      Polls? Pffft!
      The E&Y is as accurate as,say,Gallup or Zogby.
      The Beltway Boys and the Capitol Gang maintain 32% and 36% respectively with Chippy the Chimp being accurate 64% on political prognostication.
      My money is and always has been on the lower primate and not the bespectacled,drooling,slack jawed simians with the comb-over,under,sideways,downies at the round tableau,but hey,throw them a banana,they make meteorologists look like experts on Global Warming.
      Here is a tip:
      He who commissions the poll gets the type of information He pays for so that He may prove a leverage point.
      Of course "We don't pay attention to polls" when they go the other way.

      E&Y,why can't You be right,just this one time!
      50 million BEV's = Chub.:)
      • 5 Years Ago
      Fifty Million is a big number until you realize that China could absorb that many all on it's own -- over 60% of Chinese want to buy an EV or PHEV. The US auto market is generally 7 million vehicles yearly (based on statistics all the way back to 1963). 7% of that is 490,000. Not bad for a product that isn't even on the market yet. If there is a built-in market for nearly 500,000 vehicles in the US alone that is a huge market. One that would be foolish of the auto makers to ignore.

      Then there is the 25% of people who said they would "likely consider" buying a PHEV or EV. That is a huge marketing opportunity. US sales alone could mean 1.75 million vehicles a year. There is definite potential for huge growth.

      On the minus column, in the US, 17% of respondents said they would "never consider" buying an EV or PHEV, compared to 13% in Europe and 20% in Japan. I would call that segment a black hole for marketing dollars but the rest of the car buying population is fair game. Then there are the fence-sitters. Once the charging infrastructure is built out (your guess is as good as mine as to when that'll be), the 70% of people who currently would not consider EV/PHEV because they're not widespread in the market will be in play at that point.

      All in all, these numbers are optimistically pro-PHEV and pro-EV. The long term sales may fall short of what this survey calls for but not by much, IMHO. A message to auto makers: Build it and they will come!
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