Despite rising fuel prices, mass adoption of electric vehicles still a distance away

Only 16 percent of European consumers identify themselves as "potential first movers"
9 Mar 2011

Brussels, 9 March 2011 – A new survey released today by Deloitte's Global Manufacturing Industry group shows that mass adoption of electric vehicles (EVs) is still a distance away. The survey, conducted among 4,760 Europeans in seven countries1, comes on the heels of the 81st International Motor Show taking place in Geneva this week, where a number of automakers are showcasing various green technologies.

According to the survey, only 16 percent of European consumers identify themselves as potential first movers, while 53 percent say they might be willing to consider and 31 percent say they are not likely to consider purchasing or leasing an EV.

"Mass adoption of electric vehicles will be significantly influenced by a number of factors, including rising fuel prices, advancements in internal combustion engine vehicles (ICEs) and the availability of government incentives," says Eric Desomer, Automotive Leader at Deloitte Belgium. "While interest in battery electric vehicles (BEV) is growing, with 69 percent of the European respondents having identified themselves as either potential first movers or as might be willing to consider an EV today,  current market offerings generally fall far short of consumers' expectations for driving range, charging time, and purchase price. As a result, we estimate only one to two percent of these consumers actually adopting battery electric vehicles by 2020."

The survey shows that there is a tipping point in terms of fuel prices influencing consumer adoption of EVs. Sixty-three percent of the European consumers surveyed say they are "much more likely" to consider an EV if the cost of fuel rises to 2.00€ a liter. But, at the same time, if fuel efficiency reaches less than 3.0 litres per 100 kilometres in ICEs, they would be less willing to purchase an EV.

"For mass adoption, automakers will be challenged to price electric vehicles to meet the expectations of consumers while maximizing their margins," says Eric Desomer. "European consumers are not likely to want to pay a high price premium for EVs. This means that incentives such as tax reductions and exemptions, as well as bonus payments1, will continue to be very important to the purchase decision."

The majority (57 percent) of respondents who say they may be willing to consider an EV expect to pay the same or less for an EV than they do for a regular car: only about a quarter (24 percent) among the same group say they would be willing to pay a price premium of more than 1,500€. Moreover, the majority of these consumers (58 percent) expect to pay less than 15,000€ net of government incentives.

Currently, hybrids and BEVs represent a tiny fraction of total cars on the road globally.  The adoption of all forms of green vehicles – hybrids, BEVs, etc. – will be significantly influenced by government policies that will heavily shape the portfolio mix of powertrain technologies in each country as discussed in DTTL's report,  A new era.  Accelerating toward 2020 – An automotive industry transformed.  These policies will be driven by a number of factors from stricter carbon emission standards to independence from foreign energy. Additional findings from the survey include: