The insights are derived from a survey of 1,716 U.S. drivers as well as interviews with 123 auto industry executives.
I wonder the results might differ in this regard (consumers versus auto industry execs) if similar surveys were carried out in any other country.
In Australia, for example, consumers are as highly opinionated about the vehicle they drive as anywhere else on the globe, and while there is no independent auto manufacturer here I think that Australian auto executives would come up with give strong local input to their headquarters in the USA, Europe or Asia. So far, just the Mitsubishi i-MiEV is available, and only more or less on a trial basis to fleet purchasers, so it's early days in terms of getting real operational and cost feedback.
The IBM study asked drivers what would motivate them to switch from a vehicle that currently runs on gasoline, diesel or hybrid to an electric-only vehicle.
The same question was posed to auto industry executives, who were asked to rate the importance they believe drivers place on each criteria. The percentage of drivers and executives who selected each criteria is reflected in the chart below,
These insights come from the IBM Institute for Business Value (IBV) which is a relatively new international group of some 60 consultants who conduct research and analysis in 17 industries and across 5 functional disciplines, the automotive industry being one of those. Wikipedia has a quite concise summary of the interesting IBV formation and history.
Indications are that, even in these early days, there is a potentially large market for electric vehicles (EVs). Nineteen percent 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 percent 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.
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But it's going to hit the hip-pocket nerve! It seems that 40 percent of drivers said they would pay up to 20 percent more for an electric-only vehicle compared with a similarly-featured gas-, diesel, or hybrid-powered vehicle, with 27 percent saying they would pay 10 percent more and 13 percent saying they would pay 20 percent more.
The IBV research indicates that to drive the price of electric vehicles into this more affordable zone 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.
However there are some significant sticking points (not to mention the skyrocketing cost of electric power in this 'green power' age).
Price of the home charging installation often required to support an EV could pose an obstacle to EV adoption. Only 13 percent 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 US$1,000 and US$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 percent 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.' I knew it!
Perhaps a reflection of America's consumer culture, 62 percent of drivers surveyed said they most often parked in a mall or store parking lot when not at home or work. That's substantially higher than any other location - 'on the street' was number two at 17 percent.
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'It's easy to envision charging stations in these commercial locations coupled with an advertising and promotion-based business model for local stores - which will help make the economics more feasible.'
Partnering with large employers in target regions to create charging infrastructure in the workplace also makes sense, Gyimesi added.
Consumers were asked what would motivate them to switch from using a vehicle that currently runs on gasoline, diesel or hybrid to an electric-only vehicle. The same question was posed to automobile industry executives, who were asked to rate the importance consumers place on each choice.
A chart summarizing the responses follows:
|Innovative pricing models or lower price overall||71%||81%|
|Extended reach or range of the vehicles||64%||63%|
|Convenience of usage or services||63%||60%|
|Availability of charging infrastructure||62%||65%|
|Significantly higher oil prices||51%||76%|
|Green image or sustainability concerns||48%||33%|
|Government incentives or regulations||41%||73%|
The answers illustrate that the automobile industry executives IBM interviewed for this study place far greater weight than consumers on government incentives/regulations (73 percent to 41 percent) and significantly higher oil prices (76 percent to 51 percent). The executives also place less emphasis than consumers on green image/sustainability concerns (33 percent to 48 percent).
According to the IBV study, when asked executives how automakers could develop mobility solutions, 83 percent said that the best direction would be to shift their product portfolio from conventional vehicles to electric vehicles. [Author note: The IBM press release here referred to them as 'electrified vehicles' -- which is rather "shocking" -- so I took the reviewer's liberty of rewording this!].
About half said they expect the annual sales of conventional vehicles to have begun to decline by 2020.
Finally, the responses for the driver survey were similar across urban, suburban and rural areas -- with some notable exceptions.
For example, rural respondents were the most likely (59 percent) to say they would pay nothing more for an electric-only vehicle compared with a similarly-featured gas-, diesel- or hybrid-powered vehicle.
As I mused at the start, I wonder how the results would differ if the surveys were carried out in, say, Australia or Japan or China or Europe. What would you say?