Deloitte survey chart

Given the results of a survey released this month by Deloitte, it seems shocking that automakers are willing to risk it on the development of electric vehicles.

Deloitte's study, titled "Unplugged: Electric vehicle realities versus consumer expectations," suggests that consumers across the globe are unwilling to compromise when it comes to electric vehicles. Turns out, the vast majority of those surveyed weren't willing to accept an electric vehicle's limited range, high sticker price or the inconvenience of waiting for it to recharge.

Deloitte surveyed 13,000 consumers from 17 countries in Asia, Europe and North America. The most shocking bit of data, perhaps, is Deloitte's discovery that less than four percent of consumers would be satisfied with today's electric vehicles. Of course, companies selling electric vehicles would probably be very excited to have a four percent market share, but that's another issue.

The problem is that even though most drivers commute less than 50 miles a day, the majority of survey respondents illogically want electric vehicles that can go hundreds of miles. For example, Deloitte says that, in the U.S., 63 percent of the respondents would be satisfied with a range of 300 miles. Even more out of touch with reality is that respondents believe a 300-mile electric should carry a price tag that's right in line with today's fossil fuel vehicles.

But the demise of the electric vehicle might not even be related to its own inherent deficiencies. According to Deloitte, if the fuel efficiency of gasoline or diesel automobiles "consistently hits 75 mpg, interest in pure battery electric vehicles falls off the cliff."
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Global Consumers Not Plugging into Electric Vehicles: Deloitte Survey

No more than four percent of global consumers likely to be satisfied with today's electric vehicles


DETROIT, Oct. 4, 2011 - Consumers worldwide expect electric vehicles to travel farther, require less charge time and retail for a lower price than automakers are offering, according to a new survey from Deloitte.

In fact, consumers' expectations around performance and purchase price are so divergent from the actual offerings available today, that no more than 2 to 4 percent of consumers worldwide would have their expectations met, according to the survey.

The survey, "Unplugged: Electric vehicle realities versus consumer expectations," canvassed more than 13,000 consumers in 17 countries across the Americas, Asia and Europe - revealing a general desire among consumers to buy electric vehicles, but a strong unwillingness to compromise on key performance criteria and especially price.

In the United States, 12 percent of respondents indicate they would be a potential "first mover" when it comes to adopting an electric vehicle - with an additional 42 percent saying they "might be willing to consider" purchasing or leasing an electric vehicle. However, most global consumers, including those in the United States, would base their final decision on the greatest challenges associated with electric vehicles in the market today. These include range, convenience to charge and purchase price of the vehicle - all of which a vast majority (more than 85 percent) of survey respondents ranked as "extremely important" or "very important" considerations for buying or leasing an electric vehicle.

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

"The paradox here," Giffi adds, "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."

The survey also shows consumers want faster battery charge times. The majority of American consumers surveyed (58 percent) expect an electric vehicle to recharge its battery in two hours or less, and nearly one in four Americans (23 percent) expect a 30-minute charge time. 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 vehicles) as acceptable.

The more significant issue confronting automotive industry executives and policymakers around the world is unwillingness of consumers to pay much, if any, price premium for an electric vehicle. Specifically, consumers will not pay more for an electric vehicle than they currently pay for a comparable vehicle with a gasoline or diesel engine.

More than 50 percent of all consumers globally indicate they are unwilling to pay any kind of a price premium for an electric vehicle, which includes 65 percent of American respondents. Interestingly, Chinese consumers are most willing to pay a price premium, but even still, 44 percent indicate they will not pay anything extra. Consumers in the United Kingdom and Belgium are the most sensitive to paying a price premium with 71 percent opposing.

Complicating the price premium issue further is the low overall price expectations consumers have for an electric vehicle. In 11 of the 17 countries where the survey was conducted, 50 percent or more of consumers said they expect a price of $20,000 or less for an electric vehicle, far below actual costs. Consumers in the United States exhibit a good understanding of what electric vehicles will likely cost at the dealer with only 34 percent looking to purchase an electric vehicle for $20,000 or less. Nonetheless, 78 percent 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: 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 electric vehicle technology," says Giffi.
X-factors: Fuel cost, conventional-vehicle efficiency

The survey also shows consumers in the United States continue to see high fuel prices as a motivating factor for purchasing an electric vehicle. In fact, this summer's national gasoline prices averaged around $4 per gallon, according to data from the U.S. Energy Information Agency; this price point was consistent with what survey respondents would consider their tipping point on buying an electric vehicle. More than half (53 percent) of American survey respondents said a price point of $4 per gallon (an increase of approximately 10 percent over today's gasoline prices) improves their likelihood of buying or leasing an electric vehicle. Around the world, on average, it would take nearly a 28 percent increase in local gasoline prices at the pump to result in a majority of consumers being more willing to purchase or lease an electric vehicle.

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

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

"The irony in the Unites States," says Giffi, "is the higher Corporate Average Fuel Economy (CAFE) standards become, and the closer auto manufacturers come to meeting them by using a combination of more fuel efficient gasoline engines and electrified technology, the less interested consumers become in pure battery electric vehicles that use no gasoline."

The study also suggested that as consumers become more experienced with electric vehicles, new considerations for adoption - beyond factors such as range, convenience to charge, and cost to charge - will likely emerge, especially operating costs to maintain and repair the vehicle and total cost of ownership including considerations on residual value of the vehicle.

"There is a clear disconnect between consumers' expectations for electric vehicles and the actual capabilities and costs of technologies available in the market today," says Giffi. "As consumers become more educated and as technology evolves, we certainly expect that gap to shrink, but neither will happen overnight.

"For the time being, the mass adoption of electric vehicles is more likely to occur in countries that are willing and able to take an aggressive policy approach that encourages and subsidizes the market. And in today's world, with so many sovereign debt challenges, that is very likely to be a road less traveled."

For a copy of the report, "Unplugged: Electric vehicle realities versus consumer expectations," please visit www.deloitte.com/us/electricvehicles.


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  • 67 Comments
      EV News
      • 3 Years Ago
      Just don't bother publishing Deloitte EV surveys.... they're prostituted oil industry lobby propaganda.... Petrol in my neck of the woods just hit a 5 month high, about the same level as the $150 oil spike in 2008 (accept this is now the new daily reality). I would kill to replace my ICE with an EV that costs only $0.02 per km about now (accept Nissan can't make Leaf fast enough to keep up with demand and haven't even launched in my country yet) Lets see Deloitte do a survey where they ask "would you prefer a car that reduces fuel costs by 90%"??? LOL You'd see more than 4% vote YES on that one!!!
        SVX pearlie
        • 3 Years Ago
        @EV News
        Does that car which reduces fuel costs by 90% cost the same, or less, than it's oil-dependant counterpart? Does it perform the same workload? Or are there tradeoffs? Right now, the Leaf demands major reductions in size, comfort, quality, performance, and range for the same price.
      PR
      • 3 Years Ago
      Another stupid Deloitte “study” where they work the statistics until they figure out any angle possible to bash EV’s. Even if we take the 2-4% statistic at face value (don’t do it) then what conclusion are we supposed to make from this? That EV’s aren’t viable? Well, then you would have to say that BMW and Audi/VW aren’t viable companies in the US market either. Because BMW has 2%. And Audi/VW together have 3.3% of the total US market. Having current EV model sales on par with the total US sales of BMW or Audi/VW would be a massive success for early release EV’s. In fact, there won’t even be enough of the current generation of EV’s (Volt + Leaf) built to possibly fulfill a 2-4% market share. All they have done is to prove yet again that demand will outstrip supply in the near future. If anyone actually bothers to read the report, the REAL news is the massively high numbers of people surveyed are really excited for companies to build their dream EV’s. Deloitte has proven the absolute power of Halo EV’s. People’s dream EV’s will bring in people to dealerships the same way Corvette’s and M3′s and Mustangs bring in folks who end up buying something much less than their dream car. The same will happen with EV’s in the future. Real people make sacrifices when they buy cars. If you give them the same type of survey as this one for gas cars, they would demand mid-sized cars that get 50+ mpg, go from 0-60 in 5 seconds, and cost less than $20K. Cuz wouldn’t that be awesome? To say that this would prove that nobody wants to buy gas cars would be just as silly as saying this questionaire shows a lack of demand for EV's. Link to PDF of full study: http://images.thetruthaboutcars.com/2011/10/us_auto_DTTGlobalAutoSurvey_ElectricVehicles_100411.pdf
        DaveMart
        • 3 Years Ago
        @PR
        Many thanks for the link. I note that: 'It is estimated that a battery for an average electric vehicle currently can cost almost US$16,000 (see Figure 10). Although a portion of that cost is offset with the removal of the internal combustion engine, the battery for an electric vehicle is still a signifi cant incremental cost when compared to traditional vehicles. Though the unit cost of batteries are expected to decline from US$600 to US$625 per kWh ($/kWh refers to U.S. dollars per kilowatt hour) to US$330 to US$400 per kWh by 2020,' The projected price for 2020 is what Better Place say they already pay for their batteries for 2012 delivery. The lease prices on Renault batteries support this. The report also says: 'Electronic parts costs are unlikely to drop significantly' ??Really? I must have been dreaming for the last 30 years. GIGO
      Dallas May
      • 3 Years Ago
      4% = millions of high margin vehicles.
      TJP
      • 3 Years Ago
      I really don't worry about these kind of "studies" that just want to bash EV's. They are making their arrival and no-one can stop it anymore. And I welcome them! Just about everyone I've heard that have tested the Leaf, for example, have been thrilled. Gasoline is just so yesterday. The battery prices are already competing with gas prices, especially when you look at the 8-10 years you could be driving your electric vehicle. Add up all the saved maintenance costs and you're actually paying less of the EV than from the "cheap" gasoline car. And this is already happening with the FIRST generation of modern EV's, which are not even tried to be made cheap. Leaf is just the first example of an "affordable" electric car. Just wait for a few years and then there will be also used EV's available for a lot less. As market shares grow, also the battery prices will drop. They've estimated that battery prices will get halved by 2018 and already there's been announced new battery types promising huge increases in energy densities, both lithium and nickel-based (much more abundant than lithium). Also fast chargers promising 5-10 minute charge times are becoming a reality. As the recharging infrastructures improve and cars have 200 mile ranges, even the "range anxiety" will be history. This year has seen more announced technological advances than probably the whole 10 years before this.
        Anonimouse
        • 3 Years Ago
        @TJP
        I just compared the Nissan Leaf to the Altima using www.truedelta.com and maximizing shared features. The difference comes out to about $4000 in the Altima's favor not including the $7500 tax credit. Including the credit, the difference comes out to about $11500 in the Altima's favor. Please keep in mind that not everyone gets the full credit for one reason or another and that, if they do get the full credit, this represents $7500 less in revenue for the federal government. Unless Nissan warrantees the battery including the capacity loss that would trigger a replacement, I am not comfortable accepting your assertions regarding 8 to 10 year costs. Furthermore, unless there is some standardization regarding replacement batteries, I may have to pay whatever price Nissan dictates for replacement batteries because I need very specific battery types or form factors.
      Smith Jim
      • 3 Years Ago
      I'm pleased to announce that Oliver Kuttner has promised that I would receive the first production VLC. I'm very excited about it.
        Spec
        • 3 Years Ago
        @Smith Jim
        Will there actually be a production VLC?
          Smith Jim
          • 3 Years Ago
          @Spec
          The following is taken from a message I received from Oliver Kuttner, "... i sold 2000 cars yesterday. We will move toward production. There will be a NY times article on it this weekend. by Motavalli i think. The 2000 units are meter maid very light electric cars but they get the very light mechanical bits for the suspension and controls..... this means there is an upscaling on an industrial level and that makes the other 4.0 cars cheap. We are on our way .. this is getting really exciting and it is a daunting task... but we will nail it... regards Oliver..."
      Michael
      • 3 Years Ago
      FTA - The problem is that even though most drivers commute less than 50 miles a day, the majority of survey respondents illogically want electric vehicles that can go hundreds of miles. For example, Deloitte says that, in the U.S., 63 percent of the respondents would be satisfied with a range of 300 miles. Eric, It is not illogical for someone to want their vehicle to have the ability to travel distances longer than their commute. While there are plenty of 2 car households, there are also plenty of single people in this country that only have 1 car. Who are you to tell them that their weekend trips to visit friends and family now HAVE to take longer due to the fact that the car they drive can't go 300 miles without refueling. I would love to have an EV, but right now it wouldn't work for me for a multitude of reasons: 1. I live in an apartment with no charging stations 2. On weekends (4 to 6 times a year) I travel about 180 miles to visit old college friends. 3. There is no charging infrastructure in my area.
      lne937s
      • 3 Years Ago
      The current EV industry is developing rapidly. Next generation batteries will be in production before the market hits 4%... moving the goal post to a higher number. The generation after than is already in development. Infrastructure is building up-- you can already travel throughout Japan using quick chargers and should be able to travel throughout most of Europe in a little over a year from now with tens of thousands by 2015. So the target is moving. If automakers shoot for 4% now, by the time they get there the market will have already surpassed that.
      ronwagn
      • 3 Years Ago
      If 75 mg? Is the author kidding. This article has little to do with reality. Why not just wait and see how the Nissan Leaf does worldwide. I have a feeling there will be a lot of companies trying to match its sales.
      • 3 Years Ago
      Point of interest, USA sales of minivans is also about 4%. Clearly the OEMs should stop making them. http://www.goodcarbadcar.net/2011/04/auto-sales-by-segment-in-usa-and-canada.html
        Dave
        • 3 Years Ago
        Actually, many of them have. GM and Ford discontinued their minivan programs because they were not profitable. (Of course, a large CUV basically serves the same purpose)
      Spiffster
      • 3 Years Ago
      Wait until the Model S is released, it will be the catalyst for EV acceptance just as the Prius was for Hybrids. When folks start seeing those cars on the road they will begin jumping on the bandwagon. Unless of course they are blinded by certain illogical conservative ideals, or something stupid like that.
        Anonimouse
        • 7 Hours Ago
        @Spiffster
        Except that the premium for a Prius or Civic Hybrid was not very high compared with cars that people buy in the millions. I believe that the "bandwagon" for the Model S will be small. The Model S will compete for a fairly small portion of the market. It might do well in that segment ($50K plus), but offers little by way of comparison regarding the cars most people buy.
      DaveMart
      • 3 Years Ago
      Leaving the rest aside, perhaps you would produce the road tests which indicate that the Leaf is uncomfortable? All those I have seen speak of its being extremely comfortable, and up there with a Rolls for quietness.
      JoeP
      • 3 Years Ago
      Please help me with my math...I must be missing something, unless the graph has nothing to do with the data... The two most populous countries in the world are listed above 85% interested, and there are only a few countries that show less than 55% interest...the US, Canada and Japan are the only ones I see. How does that combine to be 4%?
        DaveMart
        • 3 Years Ago
        @JoeP
        Its got nothing to do with the data, and is just there to look pretty. The graphic shows percentages interested, the 4% refers to the figure Deloitte says are happy to buy with current performance levels. Here is the report: http://images.thetruthaboutcars.com/2011/10/us_auto_DTTGlobalAutoSurvey_ElectricVehicles_100411.pdf Since they assume prices in 2020 off the same level as is being paid for batteries for 2012 delivery their conclusions are hardly surprising.
          JoeP
          • 3 Years Ago
          @DaveMart
          Thanks. From reading the executive summary, the report seems just dumb. I hope it was written by unsupervised interns... For example, there is no concept of educating participants about the extra costs of electric versus current cars (much less). There are many more examples that could have given the study some legs. By that, I mean that over time, people will become more educated about an issue, and their answers will more closely resemble those who have spent time learning about it. This can make a study more like a movie than a photo snapshot- a movie will allow us to project into the future, where a photo won't. Whatever.
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