Many automobile industry executives believe that sales of traditional vehicles will peak before 2020 and are looking to electric-only vehicles (EVs) as one of the next hot products, but they will first have to address stringent consumer requirements about EV performance, recharging, and convenience, according to a new IBM survey of consumer attitudes and a recent study of auto industry executives.
RSSMany automobile industry executives believe that sales of traditional vehicles will peak before 2020 and are looking to electric-only vehicles (EVs) as one of the next hot products, but they will first have to address stringent consumer requirements about EV performance, recharging, and convenience, according to a new 62 IBM survey of consumer attitudes and a recent study of auto industry executives.
Taken together, the two studies uncover significant differences between the automobile industry executives IBM spoke to and consumers on the factors motivating consumers to purchase electric vehicles, with auto execs placing greater emphasis than consumers on government incentives and oil prices. The executives were also skeptical of consumers' willingness to pay a premium for green vehicles.
The study indicates that, even in these early days, there is a potentially large market for EVs. Nineteen per cent of drivers surveyed said that they were either "very likely" or "likely" to consider purchasing an electric-only vehicle when shopping for a new car. This is notable, given that 42 per cent of drivers know only "a little" about EVs or have "only heard of them," suggesting that automakers could increase the pool of potential buyers with sustained educational campaigns.
Thirty per cent of drivers surveyed said that they would consider switching to an EV that got 100 miles or less per charge. Current EVs get about 50 to 100 miles per charge.
And 40 per cent of drivers said they would pay up to 20 per cent more for an electric-only vehicle compared with a similarly-featured gas-, diesel, or hybrid-powered vehicle, with 27 per cent saying they would pay 10 per cent more and 13 per cent saying they would pay 20 per cent more.
To drive the price of electric vehicles into this more affordable zone, the IBV research indicates that automakers should initially focus on sales to both consumers and commercial fleets, building scale and creating economic efficiencies in production. Automakers may also need to develop new business models for electric vehicles to overcome the higher initial price.
In addition, two-thirds of consumers expect a price discount on their electricity for charging at home overnight. This expectation could place increasing focus on utilities for time-based pricing to encourage home charging, or more public charging will be required if an electricity discount is not available.
Home charging is considered important to the success of EVs. Of the drivers surveyed, 83 per cent said they park their primary vehicle in the driveway or garage of their private residence, as opposed to in a parking lot, on the street, in a shared garage or some other location.
"Even under optimal circumstances, fully recharging an electric-only vehicle takes hours," said Kal Gyimesi, IBV automotive lead and co-author of the IBV study. "So, it is crucially important that we build an infrastructure that can charge vehicles where their owners park them for extended periods of time – whether that is at home or at work, school, or the store."
Taken together, the two studies uncover significant differences between the automobile industry executives IBM spoke to and consumers on the factors motivating consumers to purchase electric vehicles, with auto execs placing greater emphasis than consumers on government incentives and oil prices. The executives were also skeptical of consumers' willingness to pay a premium for green vehicles.
The study indicates that, even in these early days, there is a potentially large market for EVs. Nineteen per cent of drivers surveyed said that they were either "very likely" or "likely" to consider purchasing an electric-only vehicle when shopping for a new car. This is notable, given that 42 per cent of drivers know only "a little" about EVs or have "only heard of them," suggesting that automakers could increase the pool of potential buyers with sustained educational campaigns.
Thirty per cent of drivers surveyed said that they would consider switching to an EV that got 100 miles or less per charge. Current EVs get about 50 to 100 miles per charge.
And 40 per cent of drivers said they would pay up to 20 per cent more for an electric-only vehicle compared with a similarly-featured gas-, diesel, or hybrid-powered vehicle, with 27 per cent saying they would pay 10 per cent more and 13 per cent saying they would pay 20 per cent more.
To drive the price of electric vehicles into this more affordable zone, the IBV research indicates that automakers should initially focus on sales to both consumers and commercial fleets, building scale and creating economic efficiencies in production. Automakers may also need to develop new business models for electric vehicles to overcome the higher initial price.
Home charging: a sticking point
Nevertheless, price of the home charging installation often required to support an EV could pose an obstacle to EV adoption. Only 13 per cent of drivers said they would consider spending more than $1,000 to retrofit their residence to support recharging of an electric vehicle. According to industry estimates, retrofitting to a 240 volt outlet accessible to vehicles averages between $1,000 and $2,000.In addition, two-thirds of consumers expect a price discount on their electricity for charging at home overnight. This expectation could place increasing focus on utilities for time-based pricing to encourage home charging, or more public charging will be required if an electricity discount is not available.
Home charging is considered important to the success of EVs. Of the drivers surveyed, 83 per cent said they park their primary vehicle in the driveway or garage of their private residence, as opposed to in a parking lot, on the street, in a shared garage or some other location.
"Even under optimal circumstances, fully recharging an electric-only vehicle takes hours," said Kal Gyimesi, IBV automotive lead and co-author of the IBV study. "So, it is crucially important that we build an infrastructure that can charge vehicles where their owners park them for extended periods of time – whether that is at home or at work, school, or the store."
