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Jan 122011

From Green Right Now Reports

Many automobile industry executives expect electric-only vehicles to be hot products.

Many automobile industry executives believe that sales of traditional vehicles will peak before 2020 and expect electric-only vehicles (EVs) to be one of the next hot products, according to a new IBM survey of consumer attitudes and a recent study of auto industry executives. But the studies also suggest that automakers will have to address consumers’ concerns about EV performance, recharging issues and convenience factors.

IBM said the two studies reveal significant differences between the automobile industry executives that IBM spoke to and consumers on the factors motivating consumers to purchase electric vehicles. Auto executies place 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 report, produced by IBM’s Institute for Business Value, resulted from a new survey of 1,716 U.S. drivers and interviews with 123 auto industry executives, the company said. The results show that, even in these early days, there is a potentially large market for 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. IBM said that is a notable figure, 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.

Thirty percent 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 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.

To drive the price of electric vehicles into this more affordable zone, the research indicates that automakers should initially focus on sales to both consumers and commercial fleets, building scale and creating economic efficiencies in production. IBM also said automakers may need to develop new business models for electric vehicles to overcome the higher initial price.

Home charging: a sticking point

The price of the home charging installation often required to support an EV could pose an obstacle to EV adoption, the report said. 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 $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, IBM said.

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.

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:

Consumers Auto execs
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%
Traffic congestion 26% 11%

IBM said 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.