Consumers’ expectations around performance and purchase price of electric vehicles are so unrealistic that automakers are unlikely to satisfy them anytime soon, according to a new survey from Deloitte.
Consumers worldwide expect electric vehicles to travel farther, require less charge time and retail for a lower price than automakers are offering, but their expectations 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.
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.
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.
