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.

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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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