Consumers “are simply not willing to pay for it,” Craig Giffi said. “They are not willing to pay a penny more.” Giffi says electric vehicles are simply too expensive and don’t provide the conveniences consumers expect.
From November 2010 to May 2011, Giffi headed a Deloitte team that conducted a global survey in 17 countries of over 13,000 consumers’ expectations from electric vehicles (EVs). The group found that while consumers are generally interested and willing to switch to electric vehicles, they expect cheaper models, shorter charging periods, and more mileage per battery charge than what is currently available. The results of the survey were published on October 4 in “Unplugged: Electric Vehicle Realities Versus Consumers Expectations.” Giffi was the lead writer. The full document can be downloaded at the top right of this article.
Giffy told Breaking Energy that the technology simply cannot catch up with expectations and demand.
“People are pretty open to electric vehicles, excitement is out there,” he said. “We’ve been good about the excitement part of it.”
But technology may simply not be able “to advance fast enough”, he said, to meet that demand.
“Consumers have this expectation that there will be some breakthrough,” Deloitte spokesperson Jon Rucket told Breaking Energy, but he says there is “no reason to expect that kind of advancement in battery technology.”
Though 80% of surveyed drivers said they drive less than an average of 80 kilometers per day, most drivers in industrialized countries said they would only be satisfied with a range of at least 480 kilometers, or around 300 miles, per charge. Battery capacity is nowhere near that number, Giffy said, and would have to improve 200-300% in efficiency to come close. The battery industry is hoping for improved technology over the last few years, but realistically that improvement will be more in the 20-50% range, he said.
Potential “first movers,” as the study call them, around the world that might facilitate transition to EVs tend to be urban-dwellers, highly educated middle to upper class individuals (men more than women) that considered themselves “environmentally conscious, tech savvy, trendsetting, and politically active.” For them, an electric vehicle (EV) could be “cool” and stylish.
The US government has been researching EVs and how to potentially convert medium and heavy duty vehicles from oil to battery-power. Read more: Electrifying Transportation.
But the study highlighted that for mainstream consumers the EV is still far beyond reach financially.
The Development Conundrum
And the consumers that said they were most likely to transition to EVs, the ones living in developing countries like India, Taiwan and Brazil, are the least able to afford them. Ironically, the majority of those drivers said they would be happy with a 160 kilometer, or about 100 mile, range–the current average capacity of most EVs. Giffy explained that these drivers have less of a personal identity investment in their car.
Rather than a car representing prestige or style, in developing countries a car is a tool to get from “point a to point b,” he said.
For consumers in developing countries, an added problem may soon be “residual value,” Giffy said. A used car with an old inefficient battery will be virtually valueless in the used vehicle market.
“Somebody is going to have to pay for it because consumers aren’t going to be real happy with that,” Giffy said.
Without heavy government investment and conducive regulations, EVs will simply stall in the market, Giffy said. You are “asking them to pay more for a technology that will give them less convenience,” he said. And CAFE standards that have forced internal combustion engine (ICE) developers to increase fuel efficiency and miles per gallon have made conventional cars capable of driving much longer on less fuel. These developments, he said, have only made EVs look worse in the competitive marketplace.
While the study painted a bleak future on battery powered electric vehicles, Giffy said there are other possibilities, including fuel-cell powered cars and other “breakthrough” technologies that the market has not yet seen.
Deloitte focused its study on lightweight vehicles rather than trucks and buses because Giffy said, a shift in consumer attitude are what is most likely going to lead to “mass adoption.” The consumer market he said is the “tipping point.”
“The dilemma for both policy makers and manufacturers is how much do they invest, where do they invest it and what geography do they invest it in,” Giffy said. “There is enough uncertainy in that to keep it a guessing a game for quite a long time.”