Electric vehicles designed for everyday driving are coming out in a matter of months. But the industry continues to play a giant guessing game over how consumers will take to them.
Deloitte Consulting on Thursday released results of a consumer survey on electric and hybrid vehicles and delivered a relatively modest forecast on volume, citing hurdles such as cost, range, and infrastructure.
It expects sales of all-electric and plug-in hybrid electric vehicles to be somewhere between nearly 2 percent and 5.6 percent of the U.S. market in 2020, or between 285,000 and 840,000 units. Share by 2015 will be at most one half of a percent, according to Deloitte, which presented its results during a teleconference on Thursday.
Estimates for the uptake of just all-electric vehicles, such as the forthcoming Nissan Leaf or Tesla Model S, vary widely. Credit Suisse pegs the number at 335,000 electric cars by 2020 while Citi forecasts more than 1 million and the Traffic Safety Administration says 750,000, according to Deloitte.
Forecasters are trying to sort out whether electric-vehicle adoption will move like rapid technology advances, such as the Internet or radio, or whether the rate will be more gradual and led largely by government incentives and environmental regulations, said Deloitte consultant Rebecca Ranish. Early on, goods such as washing machines and clothes dryers were more considered luxury items and were adopted more slowly.
For the auto industry to move quickly to electrification, it will require more investment from industry and government on infrastructure, such as public charging stations at offices or parking lots, she said. "The telephone, the radio, the refrigerator were all reliant on infrastructure to support adoption and in some cases may have been slowed by infrastructure. Electric vehicles will have a similar series of challenges," she said during the call.
Key customer group
One factor that argues for electric-vehicle adoption is the relatively large potential customer base.
In the U.S. Deloitte said that there are over 1 million people in what it called the "early majority" group. These are people who are motivated to buy electric cars by a desire to reduce oil imports and to help protect the environment. This group of people is different from "early adopters," or a smaller group willing to pay a premium for new technology.
"There are plenty of early adopters, but the real question is about the early majority. That segment is big enough to start a mass adoption curve," said consultant Robert Hill.
For that group, price, range, and familiarity with the technology are some clear concerns that automakers need to expect. Seventy-three percent of people surveyed said they expect to pay less than $35,000 and 55 percent said less than $30,000.
Assuming stable gasoline prices, Deloitte forecasts higher manufacturing volume will drive down the cost of batteries, falling from about $1,000 per kilowatt-hour now to $600 per kilowatt-hour by 2014.